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IRS Tax Tip 2013-36: Home Office Deduction: a Tax Break for Those Who Work from Home
If you use part of your home for your business, you may qualify to deduct expenses for the business use of your home. Here are six facts from the IRS to help you determine if you qualify for the home office deduction.
1. Generally, in order to claim a deduction for a home office, you must use a part of your home exclusively and regularly for business purposes. In addition, the part of your home that you use for business purposes must also be:
• your principal place of business, or
• a place where you meet with patients, clients or customers in the normal course of your business, or
• a separate structure not attached to your home. Examples might include a studio, workshop, garage or barn. In this case, the structure does not have to be your principal place of business or a place where you meet patients, clients or customers.
2. You do not have to meet the exclusive use test if you use part of your home to store inventory or product samples. The exclusive use test also does not apply if you use part of your home as a daycare facility.
3. The home office deduction may include part of certain costs that you paid for having a home. For example, a part of the rent or allowable mortgage interest, real estate taxes and utilities could qualify. The amount you can deduct usually depends on the percentage of the home used for business.
4. The deduction for some expenses is limited if your gross income from the business use of your home is less than your total business expenses.
5. If you are self-employed, use Form 8829, Expenses for Business Use of Your Home, to figure the amount you can deduct. Report your deduction on Schedule C, Profit or Loss From Business.
6. If you are an employee, you must meet additional rules to claim the deduction. For example, in addition to the above tests, your business use must also be for your employer’s convenience.
For more information, see Publication 587, Business Use of Your Home. It’s available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Additional IRS Resources:
- Form 8829, Expenses for Business Use of Your Home
- Schedule C, Profit or Loss From Business
- Publication 587, Business Use of Your Home
Related articles
- A Home-Office Tax Deduction Refresher (businessweek.com)
- When Work at Home Yields Tax Deductions (forbes.com)
- How to Determine Your Home Office Qualifies for a Tax Deduction (business2community.com)
IR-2013-28: IRS Seeks Volunteers for Taxpayer Advocacy Panel
WASHINGTON — The Internal Revenue Service seeks civic-minded volunteers to serve on the Taxpayer Advocacy Panel (TAP), which is a federal advisory committee that listens to taxpayers, identifies key issues, and makes recommendations for improving IRS services.
The TAP provides a forum for taxpayers to raise concerns about IRS service and offer suggestions for improvement. The TAP reports annually to the Secretary of the Treasury, the IRS Commissioner and the National Taxpayer Advocate. The Office of the Taxpayer Advocate is an independent organization within the IRS and provides oversight of the TAP.
“In trying to comply with an increasingly complex tax system, taxpayers may find they need different services than the IRS is currently providing,” said Nina E. Olson, National Taxpayer Advocate. “The TAP is vital because it provides the IRS with the taxpayers’ perspective as well as recommendations for improvement. This helps the IRS deliver the best possible service to assist taxpayers in meeting their tax obligations.”
The TAP includes members from all 50 states, the District of Columbia and Puerto Rico. Each member is appointed to represent the interests of taxpayers in their geographic location as well as taxpayers as a whole.
New to the TAP
For the first time, the TAP this year is seeking to include at least one additional member to represent international taxpayers. For these purposes, “international taxpayers” are broadly defined to include U.S. citizens working, living, or doing business abroad or in a U.S. territory. The new international member will not be required to attend any face-to-face meetings and cannot be reimbursed for such expenditures if he or she chooses to attend.
To be a member of the TAP you must be a U.S. citizen, be current with your federal tax obligations, be able to commit 200 to 300 hours during the year, and pass an FBI criminal background check. New TAP members will serve a three-year term starting in December 2013. Applicants chosen as alternate members will be considered to fill any vacancies that open in their areas during the next three years.
The TAP is seeking members in the following locations: California, Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Carolina, Ohio, Pennsylvania, Rhode Island, South Dakota, Texas, Washington, Puerto Rico and any other U.S. territory or location abroad. The panel needs alternates for the District of Columbia, Kansas, Kentucky, New Hampshire, New Jersey, South Carolina and Tennessee.
Applications for the TAP will be accepted through April 1, 2013. Applications are available online at http://www.improveirs.org. For additional information about the TAP or the application process, please call 1-888-912-1227 (a toll-free call) and select prompt number five. Callers who are outside of the U.S. and U.S. territories should call 954-423-7973 (not a toll-free call). You may also contact the TAP staff at taxpayeradvocacypanel@irs.gov for assistance.
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