In the past, complex forms have made it hard to claim a home office deduction with the Internal revenue Service. The tax bureau was quick to examine these claims for troubles. However, that process will be much easier when filing tax forms in 2014.
Easier to deduct your home office
All entrepreneurs and small business owners who want to deduct rooms in their homes on their taxes will have it easier here soon. The IRS is simplifying the procedure.
There were 3.4 million Americans in 2010 who deducted a home office on their taxes.
The tax code section 280A says that a taxpayer can only count the room as a deduction if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or customers in the normal course of your business, or your work as a worker, but only if the use of the home office is for the benefit of your employer."
Once cumbersome procedure made easier
Taxpayers had to fill out the 43-line Form 8829 to figure out what part of the home is really deducted for the business. This was really complicated and took a lot of work.
In 2014, it will be much less with $5 per square foot of space and up to 300 square feet.
Smaller businesses and entrepreneurs will save millions of hours in paperwork by making the change, which the Internal Revenue Service is happy about.
Nice to know there is change
A trade group for entrepreneurs, The National Association for the Self-Employed, had passionate words for the tax code upgrade.
"This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy," said Kristie Arslan, who heads the group. "The previous calculation for the deduction was cumbersome and time consuming for America's smallest business and year after year hard-earned dollars were left on the table."
The changes will be put on 2013 returns filed in early 2014.
Easier to deduct your home office
All entrepreneurs and small business owners who want to deduct rooms in their homes on their taxes will have it easier here soon. The IRS is simplifying the procedure.
There were 3.4 million Americans in 2010 who deducted a home office on their taxes.
The tax code section 280A says that a taxpayer can only count the room as a deduction if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or customers in the normal course of your business, or your work as a worker, but only if the use of the home office is for the benefit of your employer."
Once cumbersome procedure made easier
Taxpayers had to fill out the 43-line Form 8829 to figure out what part of the home is really deducted for the business. This was really complicated and took a lot of work.
In 2014, it will be much less with $5 per square foot of space and up to 300 square feet.
Smaller businesses and entrepreneurs will save millions of hours in paperwork by making the change, which the Internal Revenue Service is happy about.
Nice to know there is change
A trade group for entrepreneurs, The National Association for the Self-Employed, had passionate words for the tax code upgrade.
"This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy," said Kristie Arslan, who heads the group. "The previous calculation for the deduction was cumbersome and time consuming for America's smallest business and year after year hard-earned dollars were left on the table."
The changes will be put on 2013 returns filed in early 2014.
