Previously, intricate forms have made it challenging to claim a home office deduction with the Internal revenue Service. The tax bureau was quick to examine these claims for difficulties. However, that procedure will be much simpler when filing tax forms in 2014.
Simpler to deduct your home office
The Internal Revenue Service said Tues, Jan 15 that it will be simplifying the process 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 a worker, but only if the use of the home office is for the convenience of your employer."
Used to be too difficult
It used to be that people would spend hours filling out Form 8829 to be able to figure out how much of the home could possibly be deducted from taxes. It was a long procedure.
In 2014, those calculations will be made easier. Taxpayers can claim $5 for every square foot of the room for up to 300 square feet, or $1,500.
Small Businesses and entrepreneurs will save millions of hours in paperwork by making the change, which the IRS is happy about.
Praise for the tax code change
The change has gotten a lot of good press, especially from the National Association for the Self-Employed.
"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 changes will be applied to 2013 returns filed in early 2014.
Simpler to deduct your home office
The Internal Revenue Service said Tues, Jan 15 that it will be simplifying the process 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 a worker, but only if the use of the home office is for the convenience of your employer."
Used to be too difficult
It used to be that people would spend hours filling out Form 8829 to be able to figure out how much of the home could possibly be deducted from taxes. It was a long procedure.
In 2014, those calculations will be made easier. Taxpayers can claim $5 for every square foot of the room for up to 300 square feet, or $1,500.
Small Businesses and entrepreneurs will save millions of hours in paperwork by making the change, which the IRS is happy about.
Praise for the tax code change
The change has gotten a lot of good press, especially from the National Association for the Self-Employed.
"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 changes will be applied to 2013 returns filed in early 2014.
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