any of you write off part of your home as an office? maybe a garage that you store your stuff in.
Some might advise that this could be a flag for an audit.
so you dont? even if you could justify it?
It is a huge red flag. also when you go to sell your home some other crap comes into play its a mess. If you want I think its better to pay yourself rent on the office space if your a corp. i rent my 30 x 40 building to my corp. talk with your tax attorney
Absolutely.
If you do, you had better follow the letter to a T. My understanding is that if you write something off like office space in your home, then the ENTIRE area you are writing off has be used specifically for business. If you have a treadmill, or TV, sports equipment, old sewing machine, or anything that isn’t business stuff then you can’t do it legally. I wouldn’t think a garage would work as it probably has stuff that isn’t business related. And I’ve also heard it is a flag as well. I don’t bother with it myself, but I’m pretty small.
The IRS gives any return with home office deduction extra scrutiny. Yes, you can do it and it is legal but the IRS has specific guidelines and if you violate any of them, they will deny the deduction.
Get a copy of IRS Publication 587 from IRS.gov and study up.
Here are some points to ponder;
Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly:
as your principal place of business, or as a place to meet or deal with patients, clients or customers in the normal course of your business, or
in any connection with your trade or business where the business portion of your home is a separate structure not attached to your home.
please note the term exclusively…it means the area you intend to deduct, cannot be used for anything except business. That means that if you use a bedroom or den for your office, and you go in there to watch TV or read a newspaper or play a video game, you will be denied the deduction
-
For certain storage use, rental use, or daycare-facility use, you are required to use the property regularly but not exclusively.
-
Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.
-
There are special rules for qualified daycare providers and for persons storing business inventory or product samples.
-
If you are self-employed, use Form 8829, Expenses for Business Use of Your Home to figure your home office deduction and report those deductions on line 30 of Form 1040 Schedule C, Profit or Loss From Business.
-
If you are an employee, additional rules apply for claiming the home office deduction. For example, the regular and exclusive business use must be for the convenience of your employer.
I live out in the unincorporated part of my county. I can hang an occupational license on my property. I bought a portable shed, got a mailing address and hung my license there. I get full deductions for the expenses of the office just as if I were renting or buying an office.
I prepare taxes and help with IRS and audit letters, so PM me if you have any questions, I will try to help you if I can
So, how much in taxes were you hoping to save?
i write off a portion of my utilities since I have a home office. Its based on the total square footage vs the sq ft of home office. I write off whatever I can, whenever i can
I do as Sharen does. Our tax preparer deducts a % of our expenses as office usage. Absolutely anything allowable we will use.
Same as Dan and Sharen for me.
I am in canada and not a corporation and have been writing off the % of my square footage that i use for business. I have done so for close to 10 years. That % includes utilities, taxes, internet etc. It adds up to be quite a large deduction.
Considering half of our apartment is office and I pay for 2 garages, yes.
I paid rent to myself when we operated out of home/garage.
