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Posted by Arthur Kamlet on January 1, 2007, 12:09 am
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>> It means exactly what it says. Someone deducts the cost of a
>> home office but doesn't include any deduction for rent or
>> depreciation. Happens all the time.
> Sure, my point here is that there's no line on Schedule C
> called "home office deduction".
Try Line 30.
__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
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<< to this newsgroup as well as our anti-spamming policy >>
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Posted by bono9763@yahoo.com on December 15, 2006, 10:18 am
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> im a computer programmer. in march of 2006 i became a 1099
> independant contractor and moved cross-country (to new
> orleans!) for a client; in november i became a single-member
> LLC (disregarded entity to the IRS; filing as a sole prop).
> i have two clients, one that i work for from home, the other
> that i work for onsite. my home is a house i bought after
> arriving here.
>
> i use quicken for my income & expenses, which is pretty
> straight-forward. i plan to hire an accountant for an hour
> or two, but i wanted to do some research first before going
> in.
>
> im mainly curious about expenses. i save all of my
> business-related reciepts and log them -- gas & car costs,
> work meals, office supplies, etc. i believe i understand how
> they work.
>
> but what im not clear on, is if and how much i can expense:
>
> - monthly cell phone
> - monthly internet
> - monthly mortage (note + interest + insurance + taxs)
> - monthly utilities (elec, water, security)
> - home repairs
>
> ...all of which are used for personal use as well. my
> home-office is only 1/4 of my study, which is about 1/6 of
> my house. my home-office's two computers are also for
> personal use when im not working. this is my confusion -- it
> seemed from the IRS site that a home-office must be used
> *only* for work, not for personal, in order to claim it.
> which seemed odd to me...
>
> can anyone give me a primer, tips, etc?
The IRS requirement for a home office is that it be used
"regularly and exclusively" for business. That means that
you must use it on a regular basis for business and that
nothing of a personal nature is conducted there. It can be a
room or a portion of a room, but if it is not dedicated
solely for business use, you can't claim it as a deduction.
If you meet these requirements, you calculate the square
footage of the region and the percentage of entire house
that this represents. Then you prorate all your expenses for
the house as a whole: mortgage interest, real estate taxes,
utilities, etc.
For cell phone and internet charges, if you keep track of
the percent business use, you can prorate your expenses for
these also. However, the IRS may take the position that the
internet or cell phone is primarily for personal use, that
there is no incremental cost for also using them for
business, and may disallow these deductions.
Dennis
<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Paul Thomas, CPA on December 15, 2006, 10:24 am
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> im a computer programmer. in march of 2006 i became a 1099
> independant contractor and moved cross-country (to new
> orleans!) for a client; in november i became a single-member
> LLC (disregarded entity to the IRS; filing as a sole prop).
> i have two clients, one that i work for from home, the other
> that i work for onsite. my home is a house i bought after
> arriving here.
>
> i use quicken for my income & expenses, which is pretty
> straight-forward. i plan to hire an accountant for an hour
> or two, but i wanted to do some research first before going
> in.
>
> im mainly curious about expenses. i save all of my
> business-related reciepts and log them -- gas & car costs,
> work meals, office supplies, etc. i believe i understand how
> they work.
>
> but what im not clear on, is if and how much i can expense:
>
> - monthly cell phone
> - monthly internet
> - monthly mortage (note + interest + insurance + taxs)
> - monthly utilities (elec, water, security)
> - home repairs
>
> ...all of which are used for personal use as well. my
> home-office is only 1/4 of my study, which is about 1/6 of
> my house. my home-office's two computers are also for
> personal use when im not working. this is my confusion -- it
> seemed from the IRS site that a home-office must be used
> *only* for work, not for personal, in order to claim it.
> which seemed odd to me...
>
> can anyone give me a primer, tips, etc?
Actually, if your home office is used for personal use, you
can't claim the home office deductions. And while that may
seem odd to you, the folks elected by people like you and me
(commonly known as Congress) came up with that.
If you have a qualifying home office (used regularly and
*exclusively* for business) then 1/6th of the common
household expenses, utilities (power, water, gas, security,
and the internet), home repairs, home insurance, the
mortgage interest (but not the principal amount), and
property taxes can be taken against your business income.
Your cell phone you'll have to take a prorated amount based
on your usage of business calls -v- personal calls, and yes,
the IRS will make you get detailed bills from the phone
company to prove it out if you don't keep records).
If I were you, I'd find some way to pull your personal
computer into another location so the office space
qualifies.
You'll also find that you may not have a good grasp on some
of the other expenses. While most are cut and dry,
deductions for your vehicle usage, meals and entertainment,
and purchases of equipment and furniture are quite another
matter, as they carry significantly different rules for
deductibility and documentation.
--
Paul Thomas, CPA
paulthomascpapc@bellsouth.net
<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>
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|
Posted by bono9763@yahoo.com on December 15, 2006, 10:24 am
Please log in for more thread options
> im a computer programmer. in march of 2006 i became a 1099
> independant contractor and moved cross-country (to new
> orleans!) for a client; in november i became a single-member
> LLC (disregarded entity to the IRS; filing as a sole prop).
> i have two clients, one that i work for from home, the other
> that i work for onsite. my home is a house i bought after
> arriving here.
>
> i use quicken for my income & expenses, which is pretty
> straight-forward. i plan to hire an accountant for an hour
> or two, but i wanted to do some research first before going
> in.
>
> im mainly curious about expenses. i save all of my
> business-related reciepts and log them -- gas & car costs,
> work meals, office supplies, etc. i believe i understand how
> they work.
>
> but what im not clear on, is if and how much i can expense:
>
> - monthly cell phone
> - monthly internet
> - monthly mortage (note + interest + insurance + taxs)
> - monthly utilities (elec, water, security)
> - home repairs
>
> ...all of which are used for personal use as well. my
> home-office is only 1/4 of my study, which is about 1/6 of
> my house. my home-office's two computers are also for
> personal use when im not working. this is my confusion -- it
> seemed from the IRS site that a home-office must be used
> *only* for work, not for personal, in order to claim it.
> which seemed odd to me...
>
> can anyone give me a primer, tips, etc?
The IRS requirement for a home office is that it be used
"regularly and exclusively" for business. That means that
you must use it on a regular basis for business and that
nothing of a personal nature is conducted there. It can be a
room or a portion of a room, but if it is not dedicated
solely for business use, you can't claim it as a deduction.
If you meet these requirements, you calculate the square
footage of the region and the percentage of entire house
that this represents. Then you prorate all your expenses for
the house as a whole: mortgage interest, real estate taxes,
utilities, etc.
For cell phone and internet charges, if you keep track of
the percent business use, you can prorate your expenses for
these also. However, the IRS may take the position that the
internet or cell phone is primarily for personal use, that
there is no incremental cost for also using them for
business, and may disallow these deductions.
Dennis
<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>
|
|
Posted by Bill Brown on December 22, 2006, 1:34 am
Please log in for more thread options The day the IRS successfully asserts on audit that a
taxpayer failed to take a home office deduction (not just
depreciation but the entire deduction) when he was entitled
to do so is the day I buy drinks for regular posters to this
group at the Penny Lane Pub in Richmond VA.
<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>
|
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