Home office tax deduction rule changes
Tax season will be a little stressful next year for people who happen to work from home. The IRS announced it will roll out a more simplified method of calculating and filing home tax deductions for taxes filed for 2013. The process may still require you to break out your tape measure if you aren’t sure of your work space dimensions, but there will be less agonizing paperwork to fill out.
The normal home office tax deduction requires you to fill out nearly 40 lines of information about your home office and its associated costs, and because the IRS closely monitors this particular deduction for fraudulent reporting, if you make a mistake, you could get in serious trouble. The deduction form comes with several pages of instructions and there are numerous specifications for what counts as a home office and what doesn’t.
Not all are eligible for the home office tax deduction
Unfortunately not every business owner or freelancer that works from home can claim it, and even those that can are leery of doing so for fear of a mistake. But for those of you who do qualify, next year the IRS is allowing taxpayers to deduct a standard $5 per square foot for a home office space of up to 300 square feet. Anyone planning to claim the deduction that has more than $1500 in home office space costs will have to file using the standard form.
Filing taxes is already a lengthy process in itself, and for small business owners, things can get even trickier since all of the company revenue and expenses are recorded by you. The simplified process will help cut down on time spent figuring calculations for home office expenses and make it easier for taxpayers to be reimbursed for the numerous required expenses needed to run a business from home.