A home office deduction is allowed for those who work out of their home, but it can be tricky to understand which expenses to track and who should record and pay for the expenses.
Proper tracking and recording is key for maximizing any deduction - particularly the home office deduction.
Here is a checklist you can use to help with tracking and recording your home office expenses.
Personal Expenses for Your Home Office
A great tax benefit that comes with qualifying your home office is that a portion of your personal expenses to maintain your home becomes deductible.
Some of these expenses are not deductible otherwise. But even for those that are already deductible, such as your mortgage interest and property taxes, the way in which the home office calculation works, your deduction for these items is not subject to the limitations that otherwise apply.
Track and record (and pay) these expenses personally:
- Mortgage interest
- Property taxes
- Homeowner's insurance
- Utilities
- Security
- HOA dues
- Cleaning
- Pest control
- Other expenses that relate to the running of your entire home
Caution! Certain expenses are non-deductible. This includes pool maintenance, lawn maintenance, landscaping and the first phone line into your home.
Business Expenses
Business expenses for your home office are expenses that your business has regardless of where your office is located.
Have your business track and record (and pay) these expenses directly:
- Supplies
- Equipment
- Furniture
- Separate business phone line
- Repairs made directly to the home office
- Other expenses that are 100% business use
Claim Your Home Office Deduction
The home office is one of the best types of deductions because it turns expenses you already have into deductible expenses. This means it is eliminating tax and that is the best type of tax planning
If you have any questions about this topic, tax law changes, business tips, or how to become a client, please call us at 954-591-8290 or use our Contact form.