If you are among the millions of homeowners and renters who operate a profitable part-time or full-time business from your home, don’t forget to claim your home-business tax deductions to reduce your income taxes. It doesn’t matter if you are self-employed or you are an employee expected to work from home, such as an outside salesperson or a telemarketer.

However, if your employer provides suitable workspace, but you prefer working at home, then you don’t qualify for Uncle Sam’s generous work-at-home tax deductions. For example, if you are a computer programmer who prefers to work from home so you can supervise your pre-school child, you don’t qualify for home-business deductions if your employer provides suitable office workspace.

SELF-EMPLOYEDS MUST PASS THE PRIMARY BUSINESS LOCATION TEST. If you are self-employed, such as an independent contractor real estate sales broker, to qualify for the Internal Revenue Code 280A home-business tax deductions, your residence must be used either (1) to meet with clients, customers or patients or (2) as your primary business location for administrative activity if you have no other fixed business location.

In 1999, Congress changed the tax law to allow self-employeds working from home to deduct business expenses if their residence is their “primary business location.” Examples include a self-employed bookkeeper who travels to offices of her clients, a handyman who works at various job sites, and a computer repairman who works at many business offices during the week.

This tax law change was the result of the 1993 U.S. Supreme Court decision denying anesthesiologist Dr. Nader Soliman (113 Sup.Ct. 701) any home-business tax deductions although he worked many hours at his condominium reading professional medical journals and handling administrative details. Because he spent most of his work time at different hospitals, the court denied his home-business deductions. Today, however, he is entitled to deduct his home office expenses because his condo is his primary business location.

In the market for Delray Beach real estate? Consult with licensed agent Caesar Parisi. Caesar has assisted hundreds of buyers and sellers, giving sound advice on how to most effectively buy and sell property.

click here for article

search for : ,