| Self-employed individuals often work out of their | | | | rent or mortgage interest, insurance, maintenance, |
| own home. If this is the case with you, here's a | | | | utilities, taxes, depreciation of the home and |
| primer on what you can write off for your home | | | | repairs. Each of these home office tax expenses |
| office. | | | | figures can then be deducted. |
| Home Office - Write-Offs | | | | In addition to the above, you can also deduct |
| America is a country built on small businesses. | | | | expenses completely related to the business. For |
| Yes, the big companies are the darlings of the | | | | instance, the purchase of a desk for the office is |
| media, but the guts of our economy are the little | | | | entirely attributable to the office and can be |
| guys pursuing the American Dream from the | | | | deducted in full. |
| extra bedroom. Fortunately, the tax code | | | | Words of Caution |
| contains deductions tailored to help cut your tax | | | | There are some limitations to home office |
| bill. | | | | deductions. If you are reimbursed by an employer |
| When claiming home office deductions, it is | | | | for various expenses, you cannot also claim those |
| important to keep a receipt for each and every | | | | expenses as a tax deduction. Sorry, no double |
| amount you are claiming. When dealing with the | | | | dipping. |
| IRS, receipts are your ammo. Keep them at all | | | | For some time, there has been an urban myth |
| costs. | | | | that the Internal Revenue Service keeps a close |
| When maintaining a home office, taxpayers often | | | | eye on home-based businesses. This may have |
| wonder how they differentiate a business | | | | been true ten years ago, but is clearly not the |
| expense from a simply home expense. The key | | | | case today. To this end, the IRS has actually |
| is the square footage. Simply divide the square | | | | come out and issued clear statements to the |
| footage of your office by the total square | | | | contrary. Do not fail to claim home office tax |
| footage of the home. This number is typically | | | | expenses because of a fear of an audit. It is |
| represented by a percentage such as 20 percent. | | | | simply not a rational fear! |
| Put another way, the home office represents 20 | | | | Running a small business can be both stressful and |
| percent of the square footage of the house. | | | | incredibly gratifying. Make sure you claim home |
| Once you have the above answer, you can | | | | office tax expenses to help your cash flow. |
| multiply it by the total yearly amounts paid for | | | | |