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Facts About The Home Office Deduction
[Stacie says: Here are some good tips – part of the IRS summer tax tips series]
With technology making it easier than ever for people to operate a business out of their house, many taxpayers may be able to take a home office deduction when filing their 2009 federal tax return next year.
Here are five important things the IRS wants you to know about claiming the home office deduction.
1. Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly:
As your principal place of business, or
As a place to meet or deal with patients, clients or customers in the normal course of your business, or
In the case of a separate structure which is not attached to your home, it must be used in connection with your trade or business
For certain storage use, rental use or daycare-facility use, you are required to use the property regularly but not exclusively.
2. Generally, the amount you can deduct depends on the percentage of your home that you used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.
3. There are special rules for qualified daycare providers and for persons storing business inventory or product samples.
4. If you are self-employed, use Form 8829, Expenses for Business Use of Your Home, to figure your home office deduction. Report the deduction on line 30 of Schedule C, Form 1040.
5. Different rules apply to claiming the home office deduction if you are an employee. For example, the regular and exclusive business use must be for the convenience of your employer.
For more information see IRS Publication 587, Business Use of Your Home, available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Link: Publication 587, Business Use of Your Home
IRS Seeks Comments from Government Agencies at Upcoming Public; Forum on Proposals to Advance Tax Preparer Performance Standards
WASHINGTON — The Internal Revenue Service today announced the second in a series of public forums will be held on Wednesday, Sept. 2, in Washington, D.C., and feature a panel of federal and state officials, moderated by IRS Commissioner Doug Shulman.
The panel will include representatives from the Treasury Inspector General for Tax Administration (TIGTA) and the U.S. Government Accountability Office (GAO). Representatives from the states of California, Maryland, Oregon and New York will also participate on the panel.
Shulman announced a far-reaching review of paid preparers on June 4 to produce a comprehensive set of recommendations by the end of this year to boost taxpayer compliance and strengthen industry standards.
“This is the next important step in our open dialogue with interested parties in this effort,” Shulman said. “I’m very pleased with the quality of the feedback we’ve received so far. I’m confident these forums will ensure that all ideas are on the table when it’s time to form our recommendations.”
The forum will convene at 9 a.m. ET in the IRS Headquarters at 1111 Constitution Ave. NW, Washington, DC 20224. Anyone interested in attending should confirm attendance by sending an e-mail message to CL.NPL.Communications@irs.gov.
The first public forum was held on July 30 in Washington, D.C., and featured a panel of consumer groups and another panel of tax professional organizations. A third forum will be held in Chicago on Sept. 30 featuring independent return preparers and software industry representatives.
The IRS issued Notice 2009-60 on July 24 as an added call for public comments to ensure that all interested individuals and entities have the opportunity to contribute ideas.
Written comments must be received by Aug. 31, 2009. They should be submitted to CCPA:LPD:PR (Notice 2009-60), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044.
Comments may also be e-mailed to Notice.Comments@irscounsel.treas.gov. Please include “Notice 2009-60” in the subject line of any e-mail messages. More details can be found in the notice.
Related item:
Tax Return Preparer Review
Stacie's Tax Stuff 