Wednesday, March 6, 2013

Home Office Deduction 2012 in a Nutshell

Question from Janice in Chicago:

Hello John:

Happy Tax time. Hope this finds you doing well.

I am preparing my tax info to send to you. Just to be sure I have everything, what do I need to send regarding business or home office. I am not sure what is deductible now or if there are changes.  Thank you. Janice

Answer:

Hi Janice!!!

There are no big changes regarding home office.  If it's an employee home office, it essentially needs to be required by your employer.  If it's a business home office, it generally should be your main place of business.  In either case, the home office needs by be physically separated from the rest of the house - as by a wall or partition -- and used exclusively for business.  I will need to know the size of the office relative to the overall size of the whole residence.  You can measure office and home either size by square footage or by number of rooms.  Data required include total cost of the house, date of purchase, and all the home expenses that benefit both home and office -- such as heating, aircon, condo fees, snow removal, trash pickup, water, sewer, homeowners insurance, landscape and yard maintenance, repairs, etc, etc.  Also any expenses that benefit only the  home office -- such as painting, carpeting, cleaning, etc.

JC Leahy, MA Accounting
TaxHelpWhenYouNeedIt.com



 

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