The Home Office Deduction

tropical-home-officeHome office deductions are definitely a red flag to the Internal Revenue Service, increasing the likelihood of an audit.  However, the deductions may be worth the risk.

Meet These Criteria

  • Regularly use the space exclusively for business
  • If it is not a separate structure such as a studio or converted garage, it must be a room where no other activities are performed.
  • For employees, it must be the principle space where you conduct business or a place where you meet clients or customers.
  • And it must be used for the companies convenience or rented to the employer.

What Can Be Deducted

  • Painting etc.
  • Utilities
  • Insurance
  • General repairs
  • Burglar alarms
  • Rent  – must calculate the percentage of the home that is used for business

Then Choose Your Best Option

  • Deduct a percentage of actual expenses for which receipts are necessary or
  • Take a simplified deduction based on home square footage.

According to S. Michael Shlachtman, CPA, “Starting in 2013,  you can use the Safe Harbor method and deduct $5.00 per square foot (up to 300 square feet) for your home office.  You only need to justify the space use and not the expenses.”

Michael Shlachtman, a forensic accountant, can be reached at  (305) 448-8200 or [email protected] for further information on tax savings.

Simplified Option for Home Office Deductions

Florida Realtors

I am an estate specialist in Pinecrest, Coral Gables, and Coconut Grove.  If you would like a buyer, seller or investor consultation or would like a complementary market analysis of your home, kindly give me a call at 305-898-1852 or send me a note at [email protected].

 

 

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