Working class individuals who want to claim deductions for their home offices -- a move that is notorious for raising warning flags with the Internal Revenue Service -- will find an easier go of it under the revised tax code for 2013.
A new home office deduction
The Internal Revenue Service said Tues, January 15 that it will be simplifying the procedure for entrepreneurs and small business to deduct rooms in their homes as a place of business this year.
The IRS reports that 3.4 million Americans deducted home offices as part of their taxes in 2010.
The tax code section 280A says that a taxpayer can only count the room as a deduction if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or customers in the normal course of your business, or your work as an employee, but only if the use of the home office is for the convenience of your employer."
Not so hard anymore
However, in previous years, that was easier said than done. Taxpayers seeking the deduction were (and still are, when filing a 2012 tax return) required to fill out the 43-line Form 8829 to calculate expenditures and the portion of the home used for business. That process many found confusing and cumbersome.
In 2014, it will be much less with $5 per square foot of room and up to 300 square feet.
Smaller businesses and entrepreneurs will save millions of hours in paperwork by making the change, which the IRS is happy about.
Quite a bit of good news
The change has gotten a lot of good press, especially from the National Association for the Self-Employed.
"This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy," said Kristie Arslan, who heads the group. "The previous calculation for the deduction was cumbersome and time consuming for America's smallest business and year after year hard-earned dollars were left on the table."
The changes will be put on 2013 returns filed in early 2014.
A new home office deduction
The Internal Revenue Service said Tues, January 15 that it will be simplifying the procedure for entrepreneurs and small business to deduct rooms in their homes as a place of business this year.
The IRS reports that 3.4 million Americans deducted home offices as part of their taxes in 2010.
The tax code section 280A says that a taxpayer can only count the room as a deduction if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or customers in the normal course of your business, or your work as an employee, but only if the use of the home office is for the convenience of your employer."
Not so hard anymore
However, in previous years, that was easier said than done. Taxpayers seeking the deduction were (and still are, when filing a 2012 tax return) required to fill out the 43-line Form 8829 to calculate expenditures and the portion of the home used for business. That process many found confusing and cumbersome.
In 2014, it will be much less with $5 per square foot of room and up to 300 square feet.
Smaller businesses and entrepreneurs will save millions of hours in paperwork by making the change, which the IRS is happy about.
Quite a bit of good news
The change has gotten a lot of good press, especially from the National Association for the Self-Employed.
"This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy," said Kristie Arslan, who heads the group. "The previous calculation for the deduction was cumbersome and time consuming for America's smallest business and year after year hard-earned dollars were left on the table."
The changes will be put on 2013 returns filed in early 2014.
About the Author:
Article source: why now don't you find out more about https://personalmoneynetwork.com/cash-advance/?
No comments:
Post a Comment