home office

Deduct Home Office on Taxes

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Deduct Home Office on Taxes 1

A home office tax deduction can be a great way to reduce your taxes if you own a small business. The home office deduction gets a bad rap because a few years ago, deducting a home office was seen as an “audit trigger.” However, that issue was blown out of proportion then, and it is almost a non-issue these days, provided you do have a business and a legitimate home office. So, how do you deduct home office on taxes? How To Qualify for a Home Office Deduction Qualifying for a home office tax deduction for your business is pretty simple, providing you have a home office that you use. The official rules state that your home office must be your primary place of business, and that you use the office exclusively for that business. In other words, you can’t deduct the little area you have setup in the corner of your living room as a home office. People giving tax advice will often go overboard here saying things like, if there is even one toy in your office, then it is disallowed as a deduction. This scares legitimate small business owners with home offices from deduction them sometimes. Keep …

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Capital Gains Home Sale with Home Office Depreciation

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If you have a small business, the taxes can be pretty tough to swallow. That’s why you need to be sure that you take all the tax write offs you possibly can to lower your small business tax bill. These small business tax deductions are particularly important for solo entrepreneurs and other self-employed business owners who get stuck with additional self-employment tax. For many business owners, one important tax deduction is the home office tax deduction. This deduction allows home owners who use part of their home for business purposes to write off expenses including deducting property taxes, a portion of utilities and other costs of owning and maintaining a home. How Home Office Affects Capital Gains on Home Sale When you sell property, like your home, you typically have to pay taxes on any increase in the value of the asset. These taxes are called capital gains taxes. Fortunately, these taxes are often taxed at a lower tax rate than your standard tax bracket rate. Unfortunately, on the sale of a large asset, like your home, these capital gains can still be substantial. Luckily, there is a special home sale exclusion for capital gains on the sale of your …

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