If you regularly use your home to conduct business, you may be eligible for the home office deduction. Contrary to what some people may think, the home office deduction does not set off red flags with the IRS or make an individual more prone to being audited. This deduction allows a taxpayer to deduct home related expenses based on the amount of area in the home that is dedicated to operating a business. These expenses include mortgage interest or rent, real estate taxes, utilities, maintenance costs, home owners or renters insurance, and maintenance expenses. Other types of expenses including alarm systems and casualty losses can be deducted as well. Depreciation of your home is allowed based on the business use.
About Michelle Clouse
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Entries by Michelle Clouse
The Fourth of July has come and gone and for many business owners the mid-summer season is an excellent time to start to look ahead and begin making decisions in preparation of the end of the tax year. Part of this process should include a review of how any recent legislation may impact the business. Many such tax code changes are passed and signed into law during this time and can be overlooked when included in seemingly unrelated legislation.
One of these such changes, The Surface Transportation and Veteran’s Health Care Choice Improvement Act of 2015, passed last summer and contained many changes to the filing due dates of many business tax return filings. The estate and fiduciary returns, Employee benefit plan returns, and report of foreign account returns are also impacted by the changes. These changes go into effect for 2016 tax returns and will impact the due dates for the upcoming 2017 filing season.
The IRS allows a deduction for charitable contributions made during the tax year to qualified charitable organizations. However, understanding how and when a charitable contribution is deductible can be confusing. Commonly asked questions include such topics as what is deductible as a contribution, how are the deductions claimed, and what documentation is required.
Deciding which retirement plan is best for you and your business can be challenging. There are many different factors to weigh depending on your overall financial position. It is important to consider, how to start the plan, who the plan will cover, how much if any you plan to contribute, any tax advantages, and what additional recordkeeping or administrative cost is involved.