Support our online development, and advance our onground research initiatives in free market economics, as we seek to showcase the brightest Next-Gen minds.
THE ME-P DISCLAIMER: Posts, comments and opinions do not necessarily represent iMBA, Inc., but become our property after submission. Copyright © 2006 to-date. iMBA, Inc allows colleges, universities, medical and financial professionals and related clinics, hospitals and non-profit healthcare organizations to distribute our proprietary essays, photos, videos, audios and other documents; etc. However, please review copyright and usage information for each individual asset before submission to us, and/or placement on your publication or web site. Attestation references, citations and/or back-links are required. All other assets are property of the individual copyright holder.
Effective January 1, 2013
By Andrew D. Schwartz CPA
The IRS has introduced a simplified option for many home-based businesses and some home-based workers to use to figure their deductions for the business use of their home, effective January 1, 2013.
The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.
An Easy Path
The new option provides eligible taxpayers an easier path to claiming the home office deduction. Currently, they are generally required to fill out a 43-line Form 8829, often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Taxpayers claiming the optional deduction will complete a significantly simplified form.
No Allocation
Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A of their tax return. These deductions need not be allocated between personal and business use, as is required under the regular method.
Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees are still fully deductible.
Restrictions
Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option.
Assessment
The new simplified option is available starting with the 2013 return which most taxpayers file early in 2014.
Conclusion
Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.
Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:
- PHYSICIANS: www.MedicalBusinessAdvisors.com
- PRACTICES: www.BusinessofMedicalPractice.com
- HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
- CLINICS: http://www.crcpress.com/product/isbn/9781439879900
- ADVISORS: www.CertifiedMedicalPlanner.org
- BLOG: www.MedicalExecutivePost.com
- FINANCE: Financial Planning for Physicians and Advisors
- INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
Share this:
Filed under: Taxation | Tagged: Andrew D. Schwartz CPA, Home-Office Deduction, tax |
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
Federal workers owe more than $3.5 billion in unpaid taxes
Federal workers and retirees owed more than $3.5 billion in unpaid taxes last year, a $200 million increase over the previous year.
http://www.msn.com/en-us/money/taxes/federal-workers-owe-more-than-dollar35-billion-in-unpaid-taxes/ar-AA9X6UR?ocid=iehp
Scott
LikeLike
Simplified Home Office Deduction
Up to $1,500 deduction. If you use your home for business, you may be able to deduct expenses for the business use of your home.
In fact, the IRS has recently simplified the process of doing so, allowing those who qualify to deduct $5 per square foot up to 300 square feet (for a maximum deduction in this simplified process of $1,500).
Businesses which legitimately incur more than this in expenses can still use the old method instead.
Barber
LikeLike