Tax gurus! Home office question

[daemom]

My husband is becoming a part-time commuter within his company. I know there aren't many tax breaks but what might I need to keep track of now that I might need during tax time next year? I don't anticipate that we'll be able to write anything off, but just in case.....

 

[OrangeCountyCommuter]

Just a warning. The tax people at my CPA firm are convinced taking the home office deduction triggers an Audit flag for the IRS.

Plus you really have to have a space that is only used for work. Nothing else. I work from home and don't take it

 

[natfrac]

Yes, there are tax breaks. Like another poster mentioned the space must be dedicated in order to write off a piece of your mortgage, utilities, etc. You can also write off the cost of any required equipment, such as a PC if your husband has to provide his own. Read the IRS guidelines to make sure you follow the latest regs. I wouldn't let fear of an audit keep me from taking the deduction-I've taken it in the past without a problem.

 

[Jeff_G]

You have to prove to the IRS the telecommuting is for your companies benefit not your own. Being part time this means your husband has access to an office space. So this means the telecommuting could be for your husbands benefit not the companies.

Then as other have said the area / office must be dedicated to his work and not serve any other purpose. You have to calculate the sq footage of the office as a percentage of your total sq ft, then take that percentage of your interest payment on the mortgage.

Last if you meet all the qualifications since you are not running a business, this deduction would go against the Misc deduction which must be higher then 2% of your AGI.

If you were going to do this I would hire a tax professional to file your taxes.

 

[Cheshire Figment]

I would go to www.irs.gov and look for Publication 587, Business Use of the Home.

Mike (CPA Retired)

 

[ICF]

I work from home and don't take it

Same here -- it's just not worth the audit risk.

 

[OrangeCountyCommuter]

There are also considerations when you sell. I did the math. Was not worth the hassle for my place.

 

[khaoskat]

My husband is becoming a part-time commuter within his company. I know there aren't many tax breaks but what might I need to keep track of now that I might need during tax time next year? I don't anticipate that we'll be able to write anything off, but just in case.....

Hubby and I have been work from home for years:
1) Mortgage
2) Property Taxes
3) Insurance
4) Utilities - gas, electric, water, sewer, trash
5) Dedicated phone(s) line for working, including fax lines
6) Internet provider
7) Home Maintenance

You also need an idea of how big the room you are using is for your home office, and the total amount of space in your house.

Also, office supplies you use. If you purchase, desk, computer, printers, etc to be used in the office those are deductible, as well as any maintenance cost on them (including ink refills)....

We have never been audited...knock on wood....

 

[Anthony1971]

for part time it is unlikely worth the hassel.
the person above has a good list..
however it is more like this once you have those amounts figured out....
how much space do you use for the home office and this space must be used only for your home office if you pay your bills from that space it can not be written off much less anything else...
if you have a 1000 sq foot house and you use 100 sq feet than 10% of the bills... it will likley be far less. part time you must figure out how much of your salary is form working at home and divide again... so in the end you may end up with an actual 50 tax bill dedcution.
full timers can get back in the hundreds do not expect this huge amount as some might imply.

 

[daemom]

Thanks all!! So much info to sift through! I really don't think it will help to try to work this into our taxes, but I wanted to make sure that I was doing things that needed to be done, documented, etc. now instead of finding out next year when filing that "we could've done that". Like many DISers I want to be prepared! He had to go through a workshop on working from home--no barking dogs, doorbells heard, no distractions, etc. and yes, one must have a room that is solely dedicated to the office.

Thank you again for your valuable input!!

 

[khaoskat]

for part time it is unlikely worth the hassel.
the person above has a good list..
however it is more like this once you have those amounts figured out....
how much space do you use for the home office and this space must be used only for your home office if you pay your bills from that space it can not be written off much less anything else...
if you have a 1000 sq foot house and you use 100 sq feet than 10% of the bills... it will likley be far less. part time you must figure out how much of your salary is form working at home and divide again... so in the end you may end up with an actual 50 tax bill dedcution.
full timers can get back in the hundreds do not expect this huge amount as some might imply.

I don't have an office, but only work part time, and I end up writing off about $1500 a year in home office expenses. Our tax guy has never said anything about only claiming a portion related to your income when part time....

Again, it is not difficult, just keep an excel spreadsheet when you pay your monthly bills. Write it down in the spreadsheet (the full amount) for each bill. Then at the end of the year sort it by type (ie Gas, Elec, Mortg, etc)...and give your totals to the tax accountant.

 

[Sadie22]

There is a big difference between a self-employed person using a home office and an employee of a company working at home part-time and working at the company's office building part-time. It's important not to mix apples and oranges.

Cheshire Figment, as usual, gave great advice as only he can.

 

[vicki_c]

My husband is becoming a part-time commuter within his company. I know there aren't many tax breaks but what might I need to keep track of now that I might need during tax time next year? I don't anticipate that we'll be able to write anything off, but just in case.....

I am a full time telecommuter for a large company and don't write off anything. Even though my company doesn't pay any portion of my phone, Internet or much else. They gave me a cheap printer once and will order me printer cartridges if I ask. That's about it. It wouldn't be worth the headaches or audit risk for the small return.

 

[ariel71]

I don't have an office, but only work part time, and I end up writing off about $1500 a year in home office expenses. Our tax guy has never said anything about only claiming a portion related to your income when part time....

Again, it is not difficult, just keep an excel spreadsheet when you pay your monthly bills. Write it down in the spreadsheet (the full amount) for each bill. Then at the end of the year sort it by type (ie Gas, Elec, Mortg, etc)...and give your totals to the tax accountant.

You don't have an office and are claiming home office expenses?

 

[kydisneyfans]

My wife and I both work from home.
We take the home office deduction.
We've never been audited in the 10 years we've worked from the house.

My mother ran an in home daycare for 10+ years.
She took the office deduction.
She was never audited.

Neither of us make enough money for it to matter though.

 

[crisi]

Watch Section 1250 recapture.