If you are an aspiring entrepreneur or an employee who works from home, either on a part-time or a full-time basis, the IRS can enable you to write off the associated rent, real estate taxes, utilities and many other related expenditures. You might be provided with a couple of options to claim the home-office-deduction on your federal tax return. Below are mentioned some of the most effective tax deduction tips for the amateur business-owners –
One of the most reliable as well as result-driven options for calculating the home-office deduction, as stated by the corporate tax advisor in the USA, is known as the regular method. In this method, one needs to compute the business use of the home by distinguishing the expenditures of operating the home between professional and personal usages. The direct business expenditures are completely deductible and the percentage of the home floor space used for a business is assignable to the indirect expenses.
According to the professional tax and consulting service, the second option is known as the Simplified method that reduces the paperwork and also records the burden for the small businesses. The simplified procedure is said to have a prescribed rate of $5 a square foot for the business-related usages for the home. As per the corporate tax advisor in the USA, there is a maximum allowable deduction available depending on up to 300 square feet. Selecting this option needs the taxpayers to accomplish a short worksheet in the tax instructions and also enter the result on the tax return.
Regardless of the procedures used to compute the tax deduction, the business expenses exceeding the gross income limitations are non-deductible. The deductible expenses for the entrepreneurs use of a home adds the business portion of mortgage interest, real estate taxes, casualty losses, insurance, maintenance, repairs, etc. In general, the expenses for the parts of the home, which is not used for the business are non-deductible.
Opt for professional help:-
Be it for dealing with the tax-related concerns of you’re a small business or personal necessities, the importance of professional tax and consulting service cannot be overlooked. When it is about the tax or accounts-related matters, you may get overwhelmed by the huge amount of tax owed to the IRS. Also not every time, you can succeed to end your tax-related concerns with your limited knowledge regarding the same. This is where the importance of professional corporate tax advisor in the United States comes into play. The ambit of tax management is huge and only the professionals know how to deal with the complex financial issues sans taking too much time. The entire United States is thronging with legions of tax consultancy hubs. Make a thorough research and subsequently pick a suitable option that best fits your needs.