Home Office Deduction Explained: How to Write Off Home Office Expenses & Save on Taxes
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- เผยแพร่เมื่อ 29 มิ.ย. 2024
- If you are a business owner that does ANY work from home, and you’re NOT taking the home office deduction... then you’re probably paying more than you have to in taxes to the IRS.
Become a Tax Client: mycpacoach.com/tax-planning-s...
But don’t worry, you’re not alone… More than 2 million people overpay the IRS every year. So if you want to keep doing that, then don’t watch the rest of this video.
But if you want to take the home-office deduction on your tax return, I am going to give you all of the information you need to do this correctly in this video.
All you have to be is a business owner or independent contractor - meaning you receive 1099 income, or in other words, the income you receive is not taxed upon receipt.
If that’s you, and you work from home, then get some ready for some tips to lower that tax payment to the government.
Outline:
What is the Home Office Deduction?: (1:20)
Who Qualifies for the Home Office Deduction?: (1:58)
What Home Expenses Can You Deduct?: (2:38)
How to Calculate Your Home Office Deduction: (5:19)
Recap: (8:16)
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Super Happy I found this Channel1!! You literally explained it with grace and in simple terms! I appreciate you. My anxiety level went from 100% to 1%! Yay! Thank you, thank you!
This helped me a lot! Thank you. Happy New Year!!
Happy I found your channel, no need to look elsewhere for Tax/accounting info. Looking forward to doing business one day.
Welcome aboard!
Thank you. That was thorough and clear!
Dang this is good. Smart and clear. Rare and appreciated. Thank you.
Amazing video! You made it so easy to understand...ty sooo much!!
Very thorough explanation of this awesome small biz owner benefit...Great job!
You rock! Thanks for leaving your feedback 😃
Great info! Thanks so much for the video
What an excellent video. Really well done. Thank you. 👏🏻
Thank you. Well explained. I appreciate you.
Clear presentation, thank you.
Great Video! Keep up the good work
I LOVE your channel. You guys explain things so CLEARLY - and that takes TALENT! Thank you!!
Wow that means a lot thank you!!
I agree
Great information 👍🏾 very understandable 👍🏾
Excellent video, thank you
Great video! Thanks, your content is helping me a lot. The working in your garage and making products in your home kitchen examples actually wouldn’t qualify though right b/c they’re not exclusive to the business (assuming you use your garage for parking a car and a kitchen for cooking food)? Thx again!
thank you so much great video!
So you gonna make me watch the whole video...good one ...Im in!
💯💯
terrific info!
Great job!!
I love this thank you for the information
Glad it was helpful!
This is exactly what I was looking for
your info is great thank you
Glad it was helpful!
Great video!!
Thanks for watching!
Thank you.
Thank you!
this was very helpful, am i able to also deduct internet and electricity the same way?
Can I use a vacant mobile home as a office and shop, and deduct the rent and utilities?
Man, your videos and your information is awesome and appreciated. Can you explain this scenario for S-Corp? If you take a deduction of 18K/Year under a corporation, but on personal tax return it's 18K in rental income, so how is this really a tax write-off/deduction? Because it seems to me that at the end, S-Corp does NOT pay taxes, but the K1 personal statement pays for it. Is there a way to get by this? THANKS in advance.
Yoooo in a minute… the irs will owe me money 💰 💎
Very helpful. Did you make the video home depreciation as it related to home office deduction
Wondering the same thing, can't seem to find it.
How about if I am an employee and a business owner working from home...would your video explanation applies as well?
In the example you gave at the end of the video, you deducted part of the mortgage and not just the mortgage interest. Ij other parts of the video however you specified that mortgage interest cam be deducted (not principal itself).Is that correct and is it allowable? Thank yoi
This will be my 1st year claiming the Home office deduction. My question is how do I actually get it applied to my annual tax filing? Is there a certain form to fill out and take to my filing appointment or can I just verbally walk through it with the tax representative? Thanks.
Thanks 😁
Thank you very much for the video. I have a question: How can I do that we a partnership LLC? Thank you in advance.
If you have a home office but then sell your home after living in after 2 years, does the home office deduction affect the capital gains tax deduction?
Don’t we already write off mortgage interest? How would that reconcile with this?
Are all insurances and expenses on the home part of the deduction calculation?
Thanks a lot for the well thought out vids.
My question is, how do you determine when should try to utilize this deduction?? I am a new Homeowner and have allotted my whole lower half for my studio. I’ve bought some expensive equipment as well and I’m trying to find out if it would be worth me filing as a sole prop? I’ve made no income, just money going out. It would be great to get a little back for what I’ve spent but I can’t get any CPA’s to answer these basic questions where I’m at!!?
You could've purchased all that gear under an LLC and you wouldve gotten a tax break. Did you do that with your regular taxes? Create an LLC anyway and if you keep buying gear, use your business card to pay it.
@@NanoverseProductions thanks for your reply. Learned a lot since I posted this and have secured my LLC as well as a business card. 💫
Next feat is going to be filing taxes for the purchases I’ve made. I’m hoping to get something back off of these expenses and not end up owing!
How do you detach the utilities and transportation are you at home business
So can I use my business checking to pay my mortgage? I use my home for my business.
Can you use your converted garage into studio and apply this?
Question: Is the home office deduction taken on Schedule A or Schedule C(Income from an LLC)?
what if your deduction is more than the amount I make. By the way, I just subscribed. keep it going.
Besides the rent, mortgage interest, & utilities, what are some of the things that would be included the “much more” category for deductions? 8:40
Can you be a W2 employee AND self employed to qualify?
Yep, after you add your w2s you can add your self employment which is where you’d put those deductions
@@kiokosalaam8059we can add it with a schedule C?
I do TH-cam from home & operate a music studio at home. Can I use that ?
So do I just write myself a check once a month from the business account for the percentage of space I use?
Could I use this deduction on a 2 Bedroom Apartment ? Where the second bedroom would be completely for a Home Office?
For the home office deduction, I can't find anywhere talking about if you can still qualify for the home office deduction if you either live with relatives (but really work from home), or if it matters if you are really paying rent to those same relatives?
Can you claim this home office deduction if you aren't really paying rent (but are really working from home.)
7:09 You said "rent or mortgage payments" can be deducted. I am looking at the instructions for form 8829, and I dont see that mortgage payment can be deducted? Can you show me where they can or was that a mistake in the video?
What if you are a virtual employee not self employed but you are buying office furniture, fixing broken office window. Are those depreciated assets? Where can we enter those?
I am both an employee and starting my own home business
Great, good luck!
Sorry, to clarify, your entire mortgage payment is deductible by the percentage of your home office space? In the beginning of the video it says mortgage interest, so is it the entire mortgage payment or just mortgage interest?
If we have a home office and we also rent out a portion of our single family home, then can we deduct the 7 deductions (video: 2.48) in proportion , for both these separately from our income? Pls advise?
What is you are an employee and own a business that you run from home? Also, in order to deduct, do you have to pay those bills through your business account?
mortgage interest or mortgage (Principle + interest)???
What if you are both I get W2 but I also run a business separate from my job? Does that just screw me out of it?
You made an example of a 3000sqft home (living built area I assume)...What what if the whole lot is $8000 sqft and I use alll the back yard for business purposes? ...What if I DONT use the open space or back yard to work, then the calculation wouldn't be based on 3000 sqft but 8000 sqft and the deduction would be a lot less in your example?....In conclusion does IRS consider the whole lot or just the built area?
Can you get these deductions if you use a virtual office?
What happends when u sell your house do u pay taxes
In addition to the mortgage insurance, HOA, utilities, etc, would the office improvements like ceiling fan installation and flooring be a deductible expense?
I wouldn’t call it improvements, I would call it repairs/maintenance so in that case, yes! 😂
HOA for a house or condo you live in can be added?
I can still take the deduction if I started my business in November, right? Instead of a year's worth of expenses, I'm thinking I'd just count the expenses for those 2 months? Please confirm whether this is ok. Thanks!
Does this include a sole proprietor with a home based business?
Does this make sense as a home owner, I hear it gets taken off as profit when you try to sell the house
Good
If W2 income and started LLC. will I be able to deduct home office expenses for a business that makes $0, meaning it will eventually deduct the taxable income from W2 income as there was no income from LLC?
What about if I am a W2 Employee and then open an LLC while still employed. I have a side hustle - how will this work?
The mortgage of $2k per your example is just the mortgage interest right? does not include the principal?
Where do you write off job searches? I am confused because I don't see one person on TH-cam selling advice on doing a 2106 related to job searches in the same field .
Is this up to date? My accountant told me I have to see how much office rent it going in the area
What if you own a buisness and use your home as your office and you also work a regular job with a w2
If in my home my spouse has a office and we already to a deduction for that, can I start another bsuoness in my basement and write that off to?
I'm so glad I found this account! you guys should hop on tiktok for the younger folks
What if you have w2 wages AND own rental real estate? Can I deduct my home office then?
What if the you work and own a business do I still qualify?
FREE SAUCE‼️🙌🏾
Great video! What about if you have multiple jobs - one that you’re considered an employee and get a W-2 and another job that you user your home office for? Does this make someone qualify or can you not be an “employee” at all, anywhere, and must be full time business a owner/independent contractor?
Can't use this deduction for employee-related work.
@@LYFEAccounting sorry maybe I didn't explain myself correctly. I guess I was wondering if I am disqualified because I have another job that considers me an employee? I'd only look to seek this deduction for my contract job
@@blakestimac that's a good question and I'm wondering as well
I am not an accountant, but for the bit that I know, it is irrelevant whether you have a regular job as an employee. The only matter that counts is the portion of your home that is exclusively used for your business.
I am no expert but I will say i am an employee at a Regular job, (wage earner) and i ALSO opened a home based business in my home, an LLC and not made a single profit but i was able to deduct my start costs for my home business therefore offsetting my taxes i wouldve paid on my Regular-employee job !!
I will add that i knew this is possible bc i used TurboTax and it allowed me to do just that..
Your example of calculating the home office deduction according to the square footage percentage was confusing.This one and previous videos stated for homeowners: only certain components of the mortgage payment can be deducted (mortgage interest, property tax (included or outside of mortgage payments), etc. --the entire mortgage payment can not be deducted. I understand that monthly rent payments can, but you gave the example of monthly rent/mortgage payments which I believe is incorrect. Although, I think it was a mistake/oversight, this is misleading. Could you please make that correction on this video if it is applicable? If I am mistaken, I apologize! Thanks!
I'm a full-time w-2 employee and I just opened LLC which is not related to my w-2 job. I have a designated area in my apartment and it's being used exclusively for the administrative and all other business purposes of my LLC. Can this home office qualify for tax deduction?
I really wish you guys were taking new clients.
Is this applicable in New York City?
This is for federal taxes, so it would apply for all states
Where do you put this deduction
If I just entered the whole amount of rent, which is $1,200 per month plus give the square footage of a room, will the tax preparer do all those other calculations for me
How would this work if my home was open concept
great info, but I wish you went line by line through form 8829 since there seems to be a lot more info needed and not discussed.
This is going to bring huge savings during tax time, free $$$
💯
So I have a question on the home office deduction. My business room is 144sq feet and my total house square feet is 1432 so about 10%.
My mortgage which includes taxes and insurance is around 1500$/month.
Would it benefit me to do the simplified method in which I would get 720$, or the 10% which is about 150$ but can either of them be able to include deduction the water and electric at 10% as well then? Thank you
It’s definitely better to do the simplified method. I just heard about the simplified method today and with a 3500 apartment I can look for a big 300 square foot 2nd bedroom as an office to deduct the max $1500, awesome savings in taxes 👏 👏
Every day I work out of the clubhouse/business center (use the computers/printers and coffee lol) of my apartment complex. I pay rent. Can I use the square footage of the clubhouse to determine my deduction? My clients even come in and meet with me in the conference rooms. I also take professional pictures in the clubhouse for my social media. Surely this can be deducted in some way?
Good question, yes I would think so
Can I deduct home office expenses if I have my own business, have a home office and receive a W2 from my employer?
Great videos.
But wait I’m a little lost.
$30,000 x 33 = $10,000? (7:52)
I must have missed something.
My calculator tells me 990,000
Hey quick question. So I’m filing my taxes through turbo tax and if I use the same office space for 3 separate businesses, do I claim the entire office space for one business, divide that space into the three businesses or can I claim that entire office space for all three businesses?
Thanks in advance!
amazing question
What if your home land is 1000 sq ft covered home 300sq ft & office 100sq ft?
Hahaa! TC is the man.
If a person make income from stock/options trading...
What would be the most efficient way to write off some of the income for taxes ?
You’ve got to pay taxes on gains but take advantage of tax loss harvesting when you can.
As business owners you also get paid W-2 so make sure to mention that .
To be fair, not all business owners receive a W-2.
Example: is the $5 per sqft 10"x10" office =500 a monthly or annually?
It’s an annual deduction on your return.
Can you do this as a W2 employee that works exclusively remotely?
No.
Do you have to use a specific form to use the home office expenses?
You are working a business from home right? If so, form 8829