Now that the new year is around the corner (2015), we start to think about tax time. At least I do. For those entreprenuers out there who are in business for them selves and for those who are planning on starting a business at home, I would like to share some tax insights with you.
Beginning with taxes to be files in 2014, taxpayers, who have a home business, will have the option of claimimg a flat $5.00 per square foot for a home office, up to 300 square feet. The form for claimimg the deduction, which is capped at $1,500 per year, will be “significantly simplified,” the IRS says. Under the old rules claimimg the deduction requires filling out a 43-line form, which often involves calculating the percentage of the home used solely for business and the percentage of expenses that apply to the office – a complex process that often triggers an audit. Those rules will continue to be available to taxpayers who choose to use them. Under the new rules, home owners can’t depreciate the portion of the home used for a trade or business, but they can claim allowable mortgage interest, real estate taxes and casualty losses as itemized deductions.
If you currently claim a deduction of more than $1500.00: Decide whether the more complex rules will be better for you when you file your taxes.
I hope this helps everyone who has or plans to have a home based business.
Until next time, God Bless You All.
One thought on “Home Office Tax Deductions”
Great Article. Thanks for the info. Does anyone know where I can find a blank irs form 1040 2014 to fill out?