New Home Office Deduction Process Made Simpler
| 02:19:00 |
Previously, complex forms have made it difficult to claim a home office deduction with the Internal revenue Service. The tax bureau was quick to scrutinize these claims for problems. However, that procedure will be much simpler when filing tax forms in 2014.
Home office deduction
All entrepreneurs and small business owners who want to deduct rooms in their homes on their taxes will have it easier here soon. The Internal Revenue Service is simplifying the procedure.
In 2010, the most recent years statistics are accessible for, 3.4 million Americans claimed deductions for home offices, according to the IRS.
Section 280A of the tax code allows taxpayers to deduct expenses for an office in a private home if the room 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 an employee, but only if the use of the home office is for the convenience of your employer."
Making it easier
It used to be that people would spend hours filling out Form 8829 in order to figure out how much of the home could possibly be deducted from taxes. It was a long process.
In 2014, those calculations will be made easier. Taxpayers can claim $5 for every square foot of the room for up to 300 square feet, or $1,500.
Smaller businesses and entrepreneurs will save millions of hours in paperwork by making the change, which the IRS is happy about.
A ton of happy campers
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 2013 returns field in 2014 will be the first returns to deal with the situation.
Home office deduction
All entrepreneurs and small business owners who want to deduct rooms in their homes on their taxes will have it easier here soon. The Internal Revenue Service is simplifying the procedure.
In 2010, the most recent years statistics are accessible for, 3.4 million Americans claimed deductions for home offices, according to the IRS.
Section 280A of the tax code allows taxpayers to deduct expenses for an office in a private home if the room 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 an employee, but only if the use of the home office is for the convenience of your employer."
Making it easier
It used to be that people would spend hours filling out Form 8829 in order to figure out how much of the home could possibly be deducted from taxes. It was a long process.
In 2014, those calculations will be made easier. Taxpayers can claim $5 for every square foot of the room for up to 300 square feet, or $1,500.
Smaller businesses and entrepreneurs will save millions of hours in paperwork by making the change, which the IRS is happy about.
A ton of happy campers
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 2013 returns field in 2014 will be the first returns to deal with the situation.
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