Thursday, May 30, 2013

New Simplified Option for Home Office Deduction

ABA Tax Accounting | Income Tax Service for Small Business | St. Paul, MN Accounting Firm

Tax Strategies For Business Owners - Beginning in tax year 2013 (returns filed in 2014), taxpayers may use a simplified option when figuring the deduction for business use of their home.  
Note: This simplified option does not change the criteria for who may claim a home office deduction. It merely simplifies the calculation and recordkeeping requirements of the allowable deduction.

Highlights of the simplified option:
v Standard deduction of $5 per square foot of home used for business (maximum 300 square feet).
v Allowable home-related itemized deductions claimed in full on Schedule A. (For example: Mortgage interest, real estate taxes).
v No home depreciation deduction or later recapture of depreciation for the years the simplified option is used.
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