Business use of your home

Business use of home - You are a sole proprietor and do your own taxes using the turbotax home & business software, it will step you through this process, as well as the choice you have starting for the 2013 tax year: whether to deduct a percentage of your actual expenses (which requires you to have receipts), or take a simplified deduction based only on the square footage of your home. And since they claim the deduction as an unreimbursed job expense on line 21 of schedule a, it's subject to what's called the 2% rule: you tally up the expenses and subtract them from 2% of your adjusted-gross-income; you're only allowed to deduct the excess – if any. You might prefer the latter, but unless you have a very small home office it is likely to result in a lower deduction; the new optional deduction is capped at ,500 per year based on a square foot for up to 300 square feet. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

Preparing Form 8829 - Expenses for Business Use of Your Home

We went over the Business Use of Your Home form for reporting and determining what you can use as deductions. The space ...