How can I write off my home office as a business expense?

Question

Hello fellow investors, I was curious about writing off my "home office" as a business deduction for tax purposes. What are the necessary steps to make sure I get this deduction? Thanks.

Account Closed · Answer

You have to use a space that is not used for any other purpose, etc. So, a 12' x 12' bedroom would work nicely. Depending on your income and filing status, it may not make a hill of beans difference for the amount of work it takes to track it. It's treated as a percentage of your residence for deductions and gets kind of complicated.

Also, it increases your probability of being audited.

If you are a tax nerd, it might make sense, but then you are spending time saving pennys. If you are an investor, you are taking too much time that should be going toward growing your business.

Tyler Peitzmeier · Answer

Hey Jayden, I would ensure you work with your CPA on this. Home office expense can be pretty straight forward but you want to make sure you don't miss anything.

Jeffrey Donis · Answer

@Jayden Hamilton I'd consult with your CPA, as they could advice you on the specific steps you need to take to maximize your tax write offs.

However, my CPA told me we needed to provide: an explanation for what we'd use the home office for, a floor plan depicting where the home office was in our home, pictures, sq ft.

There is more than one way to write off a home office, so it's important you consult with a CPA to see which option maximizes your deductions. I'm not a CPA, bu I hope that helps.

Daniel Hyman · Answer

If you qualify for the deduction, you can use the simplified method of $5 per square foot. See this IRS article for more info.

https://www.irs.gov/businesses...

Basit Siddiqi · Answer

@Jayden HamiltonThe requirement for a home office is to have an area within your home that is used regularly and exclusively for your business. This will result in pro-rated rent, mortgage interest, real estate taxes, insurance and utilities to be deductible.

How can I write off my home office as a business expense?

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