Taxpayers who work out of their homes have found it challenging in the past to calculate their home office deduction for the Internal Revenue Service. Additionally, the deduction is well-known for raising red-flags with the tax bureau. However, the Internal Revenue Service says that process will be made easier and less troublesome when filing taxes next season.
Looking at a deduction for your home
The Internal Revenue Service said Tuesday, Jan 15 that it will be simplifying the procedure for entrepreneurs and small company to deduct rooms in their homes as a place of business this year.
In 2010, the most recent years statistics are accessible for, 3.4 million Americans claimed deductions for home offices, according to the IRS.
The tax code section 280A states 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 an employee, but only if the use of the home office is for the convenience of your employer."
Once cumbersome process made easier
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.
Taxpayers can take up to $1,500 in educations and $5 for every square foot of space for the deduction in 2014.
The IRS feels accomplished and like it has saved working class individuals millions of hours of complicated paperwork with the change.
Nice to know there is change
A trade group for entrepreneurs, The National Association for the Self-Employed, had passionate 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 2013 returns field in 2014 will be the first returns to handle the situation.
Looking at a deduction for your home
The Internal Revenue Service said Tuesday, Jan 15 that it will be simplifying the procedure for entrepreneurs and small company to deduct rooms in their homes as a place of business this year.
In 2010, the most recent years statistics are accessible for, 3.4 million Americans claimed deductions for home offices, according to the IRS.
The tax code section 280A states 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 an employee, but only if the use of the home office is for the convenience of your employer."
Once cumbersome process made easier
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.
Taxpayers can take up to $1,500 in educations and $5 for every square foot of space for the deduction in 2014.
The IRS feels accomplished and like it has saved working class individuals millions of hours of complicated paperwork with the change.
Nice to know there is change
A trade group for entrepreneurs, The National Association for the Self-Employed, had passionate 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 2013 returns field in 2014 will be the first returns to handle the situation.
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