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Subject Author Date
Is the upside of the home office worth the downside (if any)? jtpryan 02-14-2008
Posted by jtpryan on February 14, 2008, 11:56 am
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 I do some consulting on the side for one company for which I received
a 1099 for $7200. I also do a lot of side work for which I do not get
paid. But in any case I use my home office for this work. The
difference in my tax return by using the home office deductions is ~
$300 in my favor. Without getting into a whole discussion over
qualifications, let's assume it does qualify, is it worth it? I
understand there is something it affects if you sell the home and that
it might be a "red flag".

Thanks,
-Jim

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Posted by joetaxpayer on February 14, 2008, 2:06 pm
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 jtpryan wrote:

> I do some consulting on the side for one company for which I received
> a 1099 for $7200. I also do a lot of side work for which I do not get
> paid. But in any case I use my home office for this work. The
> difference in my tax return by using the home office deductions is ~
> $300 in my favor. Without getting into a whole discussion over
> qualifications, let's assume it does qualify, is it worth it? I
> understand there is something it affects if you sell the home and that
> it might be a "red flag".

How much of that is from depreciation, which you'll get taxed on down
the road? Everyone has their threshold, but is the extra tracking and
forms worth it to you?

(side note, I have a client who tracked her medical expenses, pages of
them for 2007. After the 7.5% floor, it added $100 to her deductions,
and saved her $15. But how much time did she waste?)

You don't want to talk qualifications, but will that home office pass
audit? Nothing else in that room?

JOE

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Arthur Kamlet on February 15, 2008, 10:36 pm
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>jtpryan wrote:
>
>> I do some consulting on the side for one company for which I received
>> a 1099 for $7200. I also do a lot of side work for which I do not get
>> paid. But in any case I use my home office for this work. The
>> difference in my tax return by using the home office deductions is ~
>> $300 in my favor. Without getting into a whole discussion over
>> qualifications, let's assume it does qualify, is it worth it? I
>> understand there is something it affects if you sell the home and that
>> it might be a "red flag".
>
>How much of that is from depreciation, which you'll get taxed on down
>the road? Everyone has their threshold, but is the extra tracking and
>forms worth it to you?


Almost all of my Sch C OIH clients do this to be able to deduct
mileage.


Employees invloved in outside sales etc also can benefit, but have
the 2% reduction.

A home office can convert nondeductible commuting miles into
deductible business miles. Someone who puts on thousands of
miles/year has a high incentive to set up a home office.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by removeps-groups@yahoo.com on February 17, 2008, 5:12 pm
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On Feb 15, 7:36 pm, kam...@panix.com (Arthur Kamlet) wrote:

> A home office can convert nondeductible commuting miles into
> deductible business miles. Someone who puts on thousands of
> miles/year has a high incentive to set up a home office.

How can you convert commuting miles to business miles?

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Arthur Kamlet on February 17, 2008, 8:34 pm
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>On Feb 15, 7:36 pm, kam...@panix.com (Arthur Kamlet) wrote:
>
>> A home office can convert nondeductible commuting miles into
>> deductible business miles. Someone who puts on thousands of
>> miles/year has a high incentive to set up a home office.
>
>How can you convert commuting miles to business miles?


Your first business trip of the day is from your kitchen
to your home office. Last trip of the night from your
home office to your kitchen.


The rest of your work related mileage is business mileage.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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