This issue has puzzled the more than 3-million individual US taxpayers who claim a home office as to what counts and what doesn’t.
Finally, the IRS announced a simplified safe harbor method that individuals may use to compute the home office deduction for tax years that begin after 12/31/12. The safe harbor is an alternative to a more complex calculation and allocation of actual expenses.
The new optional deduction is limited to $1,500 per year based on a rate of $5 multiplied by the square footage of the home used for business purposes (up to 300 square feet). There’s no depreciation for
the portion of home used as a business allowed that year, and this method can be chosen from year to year. See your tax advisor for further information on how you can plan your home-business use in 2013 accordingly.
Many of our customers operate their businesses from their homes. With mobile communications applications so accessible, it’s an ever-popular way to converse finances. And the portion of
finances that are saved on outside office space can always be invested in supplementary retirement funds. Please talk with us about the many options that are available.