Previously, complicated forms have made it challenging to claim a home office deduction with the Internal revenue Service. The tax bureau was quick to scrutinize these claims for issues. However, that process will be much easier when filing tax forms in 2014.
Simpler to deduct your home office
The procedure of deducting a room as an office in a home is really complicated, according to the Internal Revenue Service. That is why the process will be simplified.
The Internal Revenue Service reports that 3.4 million Americans deducted home offices as part of their taxes in 2010.
The tax code section 280A claims that a taxpayer can only count the room as a deduction if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or customers 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."
Used to be too hard
Working class individuals had to fill out the 43-line Form 8829 to determine what part of the home is actually deducted for the business. This was really complicated and took a ton of work.
In 2014, it will be much less with $5 per square foot of space and up to 300 square feet.
The IRS feels accomplished and like it has saved taxpayers millions of hours of complicated paperwork with the change.
A lot of happy campers
A trade group for entrepreneurs, The National Association for the Self-Employed, had enthusiastic words for the tax code upgrade.
"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 changes will be put on 2013 returns filed in early 2014.
Simpler to deduct your home office
The procedure of deducting a room as an office in a home is really complicated, according to the Internal Revenue Service. That is why the process will be simplified.
The Internal Revenue Service reports that 3.4 million Americans deducted home offices as part of their taxes in 2010.
The tax code section 280A claims that a taxpayer can only count the room as a deduction if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or customers 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."
Used to be too hard
Working class individuals had to fill out the 43-line Form 8829 to determine what part of the home is actually deducted for the business. This was really complicated and took a ton of work.
In 2014, it will be much less with $5 per square foot of space and up to 300 square feet.
The IRS feels accomplished and like it has saved taxpayers millions of hours of complicated paperwork with the change.
A lot of happy campers
A trade group for entrepreneurs, The National Association for the Self-Employed, had enthusiastic words for the tax code upgrade.
"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 changes will be put on 2013 returns filed in early 2014.
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