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Take a Closer Look at Home Office Deductions

Working from home has its perks. Not only can you skip the commute, but you also might be eligible to deduct home office expenses on your tax return. Deductions for these expenses can save you a bundle, if you meet the tax law qualifications.

Under the Tax Cuts and Jobs Act, employees can no longer claim the home office deduction. If, however, you run a business from your home or are otherwise self-employed and use part of your home for business purposes, the home office deduction may still be available to you.

If you’re a homeowner and use part of your home for business purposes, you may be entitled to deduct a portion of actual expenses such as mortgage, property taxes, utilities, repairs and insurance, as well as depreciation. Or you might be able to claim the simplified home office deduction of $5 per square foot, up to 300 square feet ($1,500).

Requirements to qualify

To qualify for home office deductions, part of your home must be used “regularly and exclusively” as your principal place of business. This is defined as follows:

Regular use. You use a specific area of your […]

Reminder of Reporting Requirement for Taxpayers with Foreign Connections

The IRS is reminding all U.S. citizens and resident aliens with an interest in or signature or other authority over foreign financial accounts, whose total value exceeded $10,000 at any time during 2014, they must file electronically with the Treasury Department a Financial Crimes Enforcement Network (FinCEN) Form 114 [Report of Foreign Bank and Financial Accounts (FBAR)] by 6/30/15. The IRS encourages taxpayers with foreign assets to determine if they have a FBAR filing requirement. Separately, certain taxpayers living abroad (U.S. citizens and resident aliens, including those with dual citizenship who lived or worked abroad during all or part of 2014) may have to file a Form 1040 for 2014, including the Foreign Account Tax Compliance Act (FATCA) related Form 8938. The Form 1040 deadline for these taxpayers is automatically extended two months, to 6/15/15, by attaching a statement to their return explaining that they were living overseas or serving in the military outside the U.S. on the regular due date of their tax return. If you have any questions, please contact your Linkenheimer LLP CPA.