I was talking with a client recently about what to be sure to give her tax accountant. When I mentioned utility and mortgage statements she was confused. I told her about the Home Office Deduction. She had been using a room in her house for her business for years and never knew there was a tax deduction for it. She asked her tax accountant about it and sure enough she qualified.
Did you know that if you have a designated room in your house you use specifically for your business a portion of your mortgage and utilities can be written off your taxes? Of course, rules apply but below are the requirements taken from the IRS website.
Gather up those utility bills and mortgage statements. Have your bookkeeper add it to your spreadsheets or hand it directly to your tax accountant and tell him/her you want to see if you qualify for the deduction. It is really quite easy and could save you a bundle.
1. Regular and Exclusive Use.
You must regularly use part of your home exclusively for conducting business. For example, if you use an extra room to run your business, you can take a home office deduction for that extra room.
2. Principal Place of Your Business.
You must show that you use your home as your principal place of business. If you conduct business at a location outside of your home, but also use your home substantially and regularly to conduct business, you may qualify for a home office deduction. For example, if you have in-person meetings with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business. You can deduct expenses for a separate free-standing structure, such as a studio, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or the only place where you meet patients, clients, or customers.
Generally, deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Home-Office-Deduction
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How can I help you with this tedious chore? I take your shoebox of receipts (don’t forget to write a few details on them – who, what & why?), categorize them, record them on a spreadsheet for your tax accountant and file them neatly away.
Hiring a bookkeeper may sound tedious and time consuming. It is not! In just a few short steps your tax time stress (at least the preparation part, sorry can’t pay the bill) is gone.
you do not have the time or energy to even think about it let alone do something about it.