Working class individuals who want to claim deductions for their home offices -- a move that is notorious for raising warning flags with the Internal Revenue Service -- will find an easier go of it under the revised tax code for 2013.
Easier to deduct your home office
The procedure of deducting a room as an office in a home is really complicated, according to the IRS. That is why the procedure will be simplified.
The IRS reports that 3.4 million Americans deducted home offices as part of their taxes in 2010.
Working class individuals can only deduct office expenses in a home, according to section 280A, if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or consumers 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 convenience of your employer."
Simplifying the process
It used to be that people would spend hours filling out Form 8829 to be able to determine how much of the home could be deducted from taxes. It was a long process.
In 2014, it will be much less with $5 per square foot of room and up to 300 square feet.
The Internal Revenue Service feels accomplished and like it has saved taxpayers millions of hours of complicated paperwork with the change.
Quite a bit of good news
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 include the change will be 2013 returns filed in 2014.
Easier to deduct your home office
The procedure of deducting a room as an office in a home is really complicated, according to the IRS. That is why the procedure will be simplified.
The IRS reports that 3.4 million Americans deducted home offices as part of their taxes in 2010.
Working class individuals can only deduct office expenses in a home, according to section 280A, if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or consumers 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 convenience of your employer."
Simplifying the process
It used to be that people would spend hours filling out Form 8829 to be able to determine how much of the home could be deducted from taxes. It was a long process.
In 2014, it will be much less with $5 per square foot of room and up to 300 square feet.
The Internal Revenue Service feels accomplished and like it has saved taxpayers millions of hours of complicated paperwork with the change.
Quite a bit of good news
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 include the change will be 2013 returns filed in 2014.
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