Tax Tip of the Week | No. 417 | Five Home Office Deduction Mistakes

Tax Tip of the Week | July 26, 2017 | No. 417 | Five Home Office Deduction Mistakes

Here are five common mistakes of those who deduct home office expenses.1. Not taking it. Some believe the home office deduction is too complicated, while others believe taking the deduction increases your chance of being audited.2. Not exclusive or regular. The space you use must be used exclusively and regularly for your business.• Exclusively: Your home office cannot be used for another purpose.• Regularly: It should be the primary place for conducting regular business activities, such as recordkeeping and ordering.3. Mixing up your other work. If you are an employee for someone else in addition to running your own business, be careful in using your home office to do work for your employer. Generally, IRS rules state you can only use a home office deduction as an employee if your employer doesn’t provide you with a local office.4. The recapture problem. When selling your home you will need to account for any home office depreciation. This depreciation recapture rule creates a possible tax liability for many unsuspecting home office users.5. Not getting help. The home office deduction can be tricky, so ask for help, especially if you fall under one of these cases.As always it is a good idea to call before considering any deductions.You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.Rick Prewitt – the guy behind TTW...until next week.