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zchehi
07-02-2009, 05:59 AM
Just wanted to know if anybody claims their home office as a deduction for tax purposes, and if it really s worth it or not.:)

Luis
07-02-2009, 06:19 AM
It's always worth exempting taxes, I exempted office space and auto expenses last year when I contracted for bright house. meals and entertainment, expenses etc. it all adds up. you will almost always have to pay some kind of tax if you dont file quarterly thought, which i learned the hard way. But I was able to deduct $2500. That's pretty worth it to me.

SOHO-NZ
07-02-2009, 08:41 AM
I'm not sure how it works in the USA, but in New Zealand, you calculate the percentage of you total floor that your business occupies. This then allows you to reclaim that pecentage amount of all mortgage / rent, electricity, and any property maintenance costs. So even the petrol in your lawnmower is partially tax deductible!

seedubya
07-02-2009, 11:20 AM
Same here in Ireland, percentage of overall floor space.

studiot
07-02-2009, 11:54 AM
Obviously anything to reduce your tax burden is only good.

They take far too much anyway.

But

In the UK at least, you have to remember another tax called Capital Gains Tax.

You pay no CGT on your residence, but have to pay CGT on any part used as a business when you sell.

There are ways round this but you need a good accountant to advise.

tartis
07-02-2009, 01:11 PM
You can take your square footage and a proportional amount of expenses (utilities, maintenance etc...). However, I believe that there are also down-sides to this if you sell your house.

supertech365
07-02-2009, 01:43 PM
Definitely worth filing deductions, as your office can depreciate quickly, especially if you have business meetings and such, keeping equipment on your hard wood floors, etc. The electric bill can shoot up significantly if you have say 6 computers being repaired at a time, all day every day. In my state, if you are in the field doing work and are away from home and have to each lunch or dinner out, its also deductible. But your accountant can tell you about that.

noah
07-05-2009, 06:12 AM
It is also a huge red flag for the IRS when determining audits. Take whatever deductions you can, but be sure to speak with your accountant to make sure your doing it right

Jory
07-05-2009, 06:27 AM
It's only worth it if it's a decent percentage of your floorspace. If you can get a ballpark figure out how much space you're using and how much all your household bills are yearly you can get an idea if it's worth it for you. Doing so adds A LOT of extra paperwork you need to keep track of, pay an account to figure, etc. If what you're saving is worth the hassle then it's a good idea to do it.