Hi, my name is Keiko. I'm a CPA, and I have spent 25 years working with small businesses just like you. Many new small businesses these days are creating most of the jobs in this country. Additionally, many of these small businesses are operating right out of their home, and that may be you as well. So, you may have a question about how to take the home office deduction. The bottom line is that Congress and the IRS have recognized that small businesses operating out of their home should have a deduction for that. Big businesses get to deduct their facility expenses, so it only makes sense that we should have that deduction as well. So, how do we go about that? Well, if you do operate out of your home, there are really only two requirements. You have to use some space in your home regularly and exclusively for business. The regular part usually isn't an issue for us because we are in there all the time anyway - weeknights, Saturdays, Sundays. The exclusive part may be more of a problem for us, and unfortunately, the IRS rules state that exclusive means exclusive. That means you can't have the baby bed in there, and you can't have the kids' video game player in there. It needs to be exclusively for business. Now, the good news is that it doesn't have to be a whole room. It can be part of a room or a partition, just half of a room. But if you have that space that you set aside for regular and exclusive use, you will have a deduction. The best news of all is that the items that are now going to be deductible include mortgage interest on the home, real estate taxes, insurance, and even the utilities that...
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Home office deduction limitation Form: What You Should Know
Home Office Deduction — TI GTA Blog Sep 16, 2024 — In 2010, Congress doubled the standard deduction and the limit on the deduction for property taxes dropped from 750,000 to 500,000 (but the home is still not on the list of allowable home expenses). Congress repealed income tax deductions for real property taxes paid by partnerships that own real property. What is the HOME DEDUCTION — Internal Revenue Service Apr 28, 2024 — If your home is your principal place of business, you can deduct the portion of your qualified business expenses paid to maintain or purchase a principal place of business in that home (or, as an exception, if your home is your “assignments residence” you can deduct your share of qualified business expenses that you pay to maintain or purchase an assistance residence in that home). What is the HOME DEDUCTION–IRS Tax Tips & Videos Oct 24, 2024 — The standard deduction for 2024 was 6,300, and a maximum of 24,000 for a married and filing a separate return. You can't use either the standard deduction or the 24,000 limitation to reduce the amount of your home-related home expenses. What is the HOME DEDUCTION TAX — Internal Revenue Service Oct 8, 2024 — When you use business expenses as the basis for your home, you can exclude up to 40 percent of the business expenses you claim. Your home can be your principal place of business (and your residence) if you use your home to conduct “qualified business” in the home. What is the HOME DEDUCTION — TurboT ax Blog Oct 6, 2024 — When you use your home as your principal place of business, you can't take any deduction for business expenses for the home. However, you can deduct the amount of business expenses you use as a basis for your business (your home) if in its actual and fair use you derive more than half your business income from qualified business sources. This rule only applies to income from qualifying business sources, not to recaptured depreciation. The home must be “in the home” for the purpose of applying this rule. When using a business location as your primary place of business, you can deduct the qualified business expenses you use in your home for the first 10 of every 12 months that you use your home as your principal place of business.
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