Home 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.
- 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
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].