Work from home has become a new normal for many people across countries and in the US too due to the COVID-19 pandemic. Many people have been working from home since months in 2020. Due to this the expenses incurred by them while working from home has increased.
Self-employed people are allowed to take deductions on their business income for expenses they incur while working from home. Self-employed people include people who are carrying on a trade or business as a sole proprietor, independent contractor, or owner in certain partnerships. Working from home has its challenges but can also bring about tax benefits to a certain extent.
Home office expenses might be one of the most feared business deductions due to concern over disallowance by the IRS. Thus, many taxpayers entitled to the deduction don’t claim it. If you use part of your home exclusively and regularly for conducting business, you may be able to deduct expenses such as mortgage interest, insurance, utilities, repairs, and depreciation for that area. You need to figure out the percentage of your home devoted to your business activities, utilities, repairs, and depreciation.
This course will cover all aspects of the home-office deduction, which is one of the more-common deductions missed by self-employed people.
MAJOR TOPICS COVERED :
- The tests for qualifying for a deduction
- Handling separate structures
- The two methods to calculate the deduction
- Special rules for daycares
- Dealing with sales of the office property, including using the Section 121 exclusion
- Business limits
- Red flags
