Home Office Tax Deductions You May Have Missed
The tax deadline is looming and if you haven’t filed your tax returns yet, you’re in luck because we’ve found some deductions available to people working out of their homes you might not have thought about. Did you deduct all you could? Check out the deductions we found to see if there is something you may have neglected to claim:
– Phone and internet costs: If you have a business line in your home you can claim these costs in full. For your internet use you may be able to claim a percentage of these costs based on the percentage of your home used for business.
– Utility costs: You may be eligible to claim a percentage of your water, sewage and electric costs.
– Landscaping costs: If you have clients meet you in your home and you pay for landscaping because of it you may be able to claim a percentage of these costs as well.
– Rent or Mortgage and Mortgage Interest: You can claim a percentage of these costs based on the square footage used for your business.
– Outsourcing costs: In most cases you can deduct the costs associated with outsourcing for your business such as using a virtual assistant, writer, graphic artist or any other outsourced task. You can also still claim your home office deductions even if you outsource several tasks provided that you handle managerial and administrative tasks exclusively in your home. ***Another perk of using On Point Executive Center’s Virtual Office services!
– Repair costs: If you have had to repair anything in the area used exclusively for business you can claim these costs.
Note: According to the IRS 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 clients 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.
The rules are also different for home businesses serving as a daycare, farms and for homes where more than one person uses their home for business use. For more information on qualified home office deductions, visit the IRS website.
If you have any doubts on what you can or cannot claim ask your accountant.
Make sure you keep thorough records in case you are ever audited. If it is later determined that you claimed deductions that you didn’t actually qualify for you may end up paying additional taxes as well as interest and penalties!
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