As an accountant in Orlando, I have seen a mayor trend in entrepreneurs starting a new business in Florida from their homes. If you use part of your home for business, you may be able to deduct expenses in your business tax return. The IRS has the following six requirements to help you determine if you qualify for the home office tax deduction.
- Generally, in order to claim a small business tax deduction for your home, you must use part of your home exclusively and regularly:
- as your principal place of business, or
- as a place to meet or deal with patients, clients or customers in the normal course of your small business, or
- in any connection with your trade or business where the business portion of your home is a separate structure not attached to your home.
- For certain storage use, rental use or daycare-facility use, you are required to use the property regularly but not exclusively.
- Generally, the amount you can deduct from your taxes depends on the percentage of your home used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.
- There are special rules for qualified daycare providers and for persons storing business inventory or product samples.
- If you are self-employed, Form 8829, Expenses for Business Use of Your Home to figure your home office tax deduction and report those deductions on Form 1040 Schedule C, Profit or Loss From Business.
- If you are an employee, additional rules apply for claiming the home office tax deduction. For example, the regular and exclusive business use must be for the convenience of your employer.
If you have any questions regarding Home Office Tax Deductions or any other tax service inquiry, please contact us at 407-344-1012. God Bless.
Freedomtax Accounting is a full service business accounting firm, specializing in tax services that include: personal tax return preparation, corporate tax return preparation, bookkeeping, payroll, tax debt relief, tax problems, non profit 501C3 tax exempt status application, and incorporations in Florida.