Home Office Space / Equipment Tax Write Off

benne13benne13 Posts: 3subscriber
edited January 2009 in Home-Based Businesses


Hello,


 


When you home is your "office", what items can be included as a business tax write-off?  Can the normal office equipment (Computer, printer, internet, cellphone, etc..) along with a portion of the house be included as designated space and or items solely for your business?


 


This question may have been asked before, so I apologize in advance.


 


Thanks,


~Jeff


 

Comments

  • mkolochmkoloch Posts: 0subscriber
    I`m in PA, so not sure if things vary by state. With my current job I am required to have a home office. So with that being said, your tax deducts are based on the space as said above. Your bills for energy, water, etc... can be deducted based on that percentage. However, I ran into a snag with the equipment. If your computer, printer, scanner, TELEPHONE is used for purposes other the work/making money (i.e. kids surfing the internet), that also will be a deduct of the percentage. Once the equipment is bought, thats the only chance you have for a tax deduct.
    I have separate equipment for work, just keeps my life more simple.
  • WebJunkyWebJunky Posts: 8subscriber Member
    also make sure to look into the section 129 deduction...check with your CPA at least.  this allows you to forego the depreciation and expense the entire asset in the year of purchase (up to a certain amount).
     
    good luck
  • nevadasculnevadascul Posts: 3subscriber Member
    It`s tough to deduct home based business expenses.  I talked to my tax preparer about this.  First, is your home office actually an office or a room where you conduct business?  Is it used for other purposes?  Your computer and supplies if used for other purposes may only be partially deductible.  You may have to calculate how much time your computer is used for business for example.  If you have a dedicated phone line for your business, you may be able to deduct that expense.  But, if you are just using your regular home phone to occasionally conduct business, you may only be able to deduct a portion of your bill.  It all comes down to determining whether the item is used exclusively for business, or it`s a shared use.  If it is shared use you may not be able to deduct the cost or not get enough to make it worth the effort to deduct.
    You can deduct publications that are specific to your business.  For example, I used to buy magazines on warehousing when I ran a warehouse.  Writing magazine might be tax deductible.  I was also able to deduct the cost of my web site and yearly subscription to an on line writers market.
    But the best advise has already been posted, see an accountant.  An accountant can tell you what is and isn`t deductible.  They can also tell you what records you need to set up to justify your deductions.nevadascul12/9/2008 1:08 PM
  • TaxLadyEATaxLadyEA Posts: 0subscriber
    If you are doing this on your own.. without talking to a tax professional.. you are more than likely going to mess up.
     
    Home Office done correctly.. not a problem.
    Home Office done incorrectly.. a major audit area.
     
    It doesn`t save money to keep you out of a hole.. it costs to get you out...
    Yeah.. we do that too  )  )
  • TaxLadyEATaxLadyEA Posts: 0subscriber



    kywomanjt

      and I cannot stress this enough... If not done properly... you stand a high risk of losing under audit. 
     
    As it is `home office deductions` are more highly scrutenized by both the IRS and the various states... claiming it can make you more susceptible to an audit.. BUT.. done correctly.. you will walk through (hopefully) with a `no change` audit.
     
    You have a right to take all deductions LEGALLY allowed.
     
    Number one rule?   Good recordkeeping and documentation!!
     
  • WebJunkyWebJunky Posts: 8subscriber Member
    kwomanjt - i think it would be good if you can provide a quick synopsis (bullet points?) of common mistakes peolpe make that trigger their tax returns for audit.  personally, i just don`t know how the IRS determines what to and who to audit?  is there a rule in place that makes them take certain actions ?
  • accessofficeaccessoffice Posts: 0subscriber
    Nowadays, many people are running business from their home to save money on commercial properties. However, sometimes it can be very difficult to concentrate when working from home, because of the unwanted disturbance. Hence, it is so important to have a good space to have your home office in.
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