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Take Advantage of the Home Office Deduction

 
Are you taking advantage of the home office deduction?

The home office deduction is allowable if you have a space in your home that is exclusively used for business. So it can’t be your living room couch or your dining room table. So you’ll need an area like a desk, it doesn’t have to be an entire room. It just has to be an area that can be marked off that could be walled off but it doesn’t have to be.

With the home office deduction, you are allowed to take a percentage of the expenses for operating your home as part of the home office deduction. The percentage is based on the entire square footage of your home versus the area exclusively used for business.

The secondary part of the qualification is that the area in your home has to be used for the administrative work of business, those where you do your bills, kick off with your records, maybe access your website to do updates in marketing.

That is one way to calculate, there is also an alternative that will allow you to take $5 per square foot times the area used for business to come to the home office deduction. For example, your home office is 10 by 10 feet, which means it’s 100 square feet. If you use the standard allowance of $5 per square foot, that means you have 100 square feet, times $5 for a $500 tax deduction.

Most of the time we see the home office deduction generating a deduction of around a thousand to $2,000, just depending on how big the office space is. You can also count all areas if you store inventory in your home. So that’s another advantage to utilizing the home office. You have access to supplies that you keep in a closet or in a corner of your desk area room, then you can deduct those two.

We can help make sure that you get every deduction you deserve and don’t pay Uncle Sam any extra money that you don’t have to. I’m Donna Bordeaux with Sweet Tooth CPA. Please follow us on our Facebook page as well as the YouTube channel to keep these tips coming.

Donna Bordeaux, CPA with Sweet Tooth CPA

Creativity and CPAs don’t generally go together.  Most people think of CPAs as nerdy accountants who can’t talk with people.  Well, it’s time to break that stereotype.  Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux.  They have over 50 years of combined experience as entrepreneurial CPAs.  They’ve owned businesses and helped business owners exceed their wildest dreams.   They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.