Taxpayers who work out of their homes have found it difficult previously to determine their home office deduction for the Internal Revenue Service. In addition, the deduction is notorious for raising red-flags with the tax bureau. However, the IRS states that procedure will be made easier and less troublesome when filing taxes next season.
Home office deduction made easier
All entrepreneurs and small business owners who want to deduct rooms in their homes on their taxes will have it easier here soon. The Internal Revenue Service is simplifying the process.
In 2010, the most recent years statistics are available for, 3.4 million Americans claimed deductions for home offices, according to the Internal Revenue Service.
Section 280A of the tax code allows taxpayers to deduct expenditures for an office in a private home if the room 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."
Making it easier
It used to be that people would spend hours filling out Form 8829 to be able to determine how much of the home might be deducted from taxes. It was a long procedure.
In 2014, those calculations will be made simpler. Working class individuals can claim $5 for every square foot of the space for up to 300 square feet, or $1,500.
The Internal Revenue Service states the form will also be much simpler to understand and to fill out. The Internal Revenue Service states the move will save small business and entrepreneurs 1.6 million hours a year in paperwork and record keeping.
A ton of happy campers
The National Association for the Self-Employed is pretty happy about the change, and so are others.
"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 first returns to incorporate the change will be 2013 returns filed in 2014.
Home office deduction made easier
All entrepreneurs and small business owners who want to deduct rooms in their homes on their taxes will have it easier here soon. The Internal Revenue Service is simplifying the process.
In 2010, the most recent years statistics are available for, 3.4 million Americans claimed deductions for home offices, according to the Internal Revenue Service.
Section 280A of the tax code allows taxpayers to deduct expenditures for an office in a private home if the room 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."
Making it easier
It used to be that people would spend hours filling out Form 8829 to be able to determine how much of the home might be deducted from taxes. It was a long procedure.
In 2014, those calculations will be made simpler. Working class individuals can claim $5 for every square foot of the space for up to 300 square feet, or $1,500.
The Internal Revenue Service states the form will also be much simpler to understand and to fill out. The Internal Revenue Service states the move will save small business and entrepreneurs 1.6 million hours a year in paperwork and record keeping.
A ton of happy campers
The National Association for the Self-Employed is pretty happy about the change, and so are others.
"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 first returns to incorporate the change will be 2013 returns filed in 2014.
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