How To Setup a Home Office Deduction (Full Walkthrough)
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#taxes #taxfreeliving #taxexpert #taxreduction #llc
#taxes #taxfreeliving #taxexpert #taxreduction
Starting a new business? Tax expert Karlton Dennis is here to show you the Top 5 things YOU should be most focusing on as you go through the steps of starting your business.
Some of these include:
-Taking an income-first approach
-Understanding what kind of people are under more scrutiny from the IRS
-The importance of liability and your new business!
⚠️ #TaxDeductions #Taxes #llc ⚠️
Take a walk-through with tax expert Karlton Dennis on how to take a home office deduction in a rented apartment, step-by-step!
It's simple! We will
-take a tour of the entire (rented!) apartment
-figure out which spot in the place will be the permanent home office
-then do some simple math to conclude what the overall tax savings will end up as!
Watch this video to avoid overpaying to Uncle Sam and to get educated on how to leverage the tax code!
*Disclaimer: I am not a financial advisor nor am I an attorney. This information is for entertainment purposes only. It is highly recommended that you speak with a tax professional or tax attorney before performing any of the strategies mentioned in this video. Thank you.
![How to Use Rental Losses to OFFSET W2 Taxes! [Part 1]](http://i.ytimg.com/vi/1a38vrvO-ko/mqdefault.jpg)
![How to Use Rental Losses to OFFSET W2 Taxes! [Part 1]](/img/tr.png)
Can I get your tax professional to do my taxes this year?
I loved this video SOOO much value. I can't wait to apply what I learned here. Mind blown! Thanks SO much, Karlton.
You really are a genius!! Thanks for this!
Yeah the bathroom is not going to pass the exclusivity test.
can somebody help me understand the last part of this……. only $2626 in savings? why do you take the 8k number and divide it by the 32% tax bracket….. why is that necessary? where do i go to learn about this because the ‘deduction’ was 8k but the ‘saving’ is 2.5k
I felt like he made a mistake here. I think it would be 8.6k - 2.5k = 6k in tax savings. Because you don’t get 32% of savings, but the remaining 68%. Could be wrong though. Still looking for an explanation.
Karlton absolutely amazing content you’ve provided. IRS publication 587 mentions free standing structures. What if my garage is attached to house and exclusively use for my business vehicle can I include sq ft as an additional deduction?
I see you measured from the baseboard. The baseboard is usually up to 1/2" thick, which means you could have added up to 1" to each measurement. It's not much, but every little bit helps.
Love the creativity of the beginning of the video! A good laugh! You getting better and better at this! Great information as always. So proud of you! Keep going❤️
You are giving away multi-million dollar worth of knowledge for free.
Not for free, hes proving the value of his knowledge and services and how much he charges with informative videos which he also capitalizes on by our watching clicking and commenting. Its not for free, plus write off expenses for the camera, computer etc to create this material.
@@frenchyalicea649 It didn't cost me anything, and I have decided to buy a 4BR house instead of a 3BR for a home office.
He is indeed giving out incredibly valuable information to his viewers for free, including carefully explaining how to get these deductions.
As a business owner I’ve spent so much hard earned money on tax advising services for information he is giving away for free in his videos and every video I’ve clicked on and watched is true and reliable information!👍👍
@@thehaitianambassador215 im referring to "not free" because as I stated it actually cost "him" to make it but he gets compensated via clicks, ad revenues etc. So yeah it may be free for us to watch it, but hes definitely getting paid for it via how I stated previously.
@@frenchyalicea649🧠❣️
Omg, thank you thank you! Even my CPA never explained this to me. Your explanation are so clear and understandable. 🙏
great information. I've been selling real estate in GA for almost 15 years. Using the percentage method for a while now but I see there is still money being left on the table. Thanks
Simply one of the best TH-camrs in the game!!!!🔥🔥🔥🔥, I can't wait to meet you!!! Much Respect. Also, if your paying attention; Karlton is giving away little tax deduction nuggets throughout the entire video.
I just want to thank you for such a clear breakdown. I appreciate you!
So the simplified tax deduction of $1,500 can only be utilized once, per year? Not $1,500 a month? I've been following you now, Karlton, and look forward to doing business with you in the near future. GOD bless my brother.
Such a professional, informative and interactive video. I like this 👍
Not sure why this popped up on my feed, but this is awesome. new subscriber here. Great stuff. Love the content!
Great editing (another business for sure * Creative director :) ) and as always very educational..... Much appreciated. One question on 20:44 with Taxes when Itemizing can we take it both on the the Sch A and then also on the home office deduction as well or only can we only take the deduction in one area? Thank you
Both!
@@karltondennis would that be allowed as it would be double dipping right? thanks
Can this be done with a single LLC or does it require an S-Corp??
I love this channel. Exactly how the wealthy stay wealthy
I need help in my 60s and own my home! Please, I am a 1099 disabled person who wants to grow enough to be free of the government “ telling us”, you can only make a little cash or lose it all!!!
Your one of the most impressive people I’ve ever seen on REAL TAX LIFE!
You are amazing! Thank you so much for sharing your knowledge. I didn't know any of this. I'm shocked by the amount of money that I've been leaving on the floor. Thank you!
I was wondering about this exact thing the other day. So I TH-camd it and found this. Thanks for sharing.
Hey Karlton, What about my situation where I am a handyman contract I use my whole cellar as a storage for my tools and materials?
Thank you ! You made that soooo clear like never before !
I came across your channel today and I am thoroughly impressed. My husband just started a second business and with this business we have actually created a home office. This video I exactly what I needed. I appreciate your knowledge and I appreciate you sharing you knowledge with people like me🙏🏽❤️
Can someone explain why he went from $8,208 tax write off to $2,626 tax savings? So the difference between the simplified method ($1,500) and the regular method ($2,626) would only be $1,126? Or Am I understanding it wrong? Please shed some light.
@@sweetlynaz an $8,208 tax write-off reduces your income by that amount, which reduces the taxes owed by $2,626 (depending on the tax bracket)
@@sweetlynaz If you write off using simple method of $1500 you would have a tax savings of $381 with 24% tax rate. So compare $381 vs $2626 tax savings.
So if bathroom is used by other people does it still meet the exclusivity test? Same with closet, what if you have a few non business items in there too?
Great video! Loved seeing an on-site walk through and breakdown on the whiteboard. You do such a great job of simplifying concepts that others try to make sound so complicated. Keep ‘em coming 👍🏻
Here's a question for you Mr. Dennis, Am I still able to use the home office deduction in my rented apartment EVEN if I use a virtual office address for my business? I do conduct business from my home, which is a rented apartment.
Maybe it's a utility closet. Broom mop cleaning supplies.
It is
Did you include the 18% of utility expenses for regular deductions in the video?
What's the best way to document your home office? Additionally, do you write a contract to sub-let the area to the business?
how does this work for S Corp Filing?
so if my prop taxes and utilities, etc....can I times that by 18% and get a wrtie off on that ?
so I'm opening a business in which I will be using the front room (formal living room) the downstairs bathroom (only for clients) and then an entire bedroom for my second business (photostudio). And I will have all photos and videos on social media showing thee use. They hallway is crazy. I didn't think about that!!
This is amazing awesomeness!! You saved me from procrastinating doing my taxes. This is so fire! I am a new 1st owner occupied - landlord/property manager. How do I take deductions for shared household cleaning items?
What do you do if it's a 1BR-1BA? Would you just tape off the area on the floor showing the desk and chairs is used exclusively for business? There's no exclusive room in this case. You are either mixing the living room or the bedroom in there
What If your home is owned by you no morgae .. would it be best to get a office outside of my house. Or jus deduct the office space
I'd like to know this as well! Did you find the awnser?
I have a question. what if a business owner lives in an apartment that is around 700 sq/ft and wants to use the bedroom as the office but the square footage of the apartment is only 2-3$ per sqft? can they still take out 5 or does the write off have to mirror the whole apartments sqft price? thanks man I love your videos.
If sole proprietor and I have Xtra bedroom I use primarily for business, but some of it is being used for personal storage and a guest bed. Can I draw up a contract with my wife that she pays my business 1 cent per sf per year for storage\bed space in that room. Effectively making that space 100% business use? Then I could claim the entire room sf on deduction.
How you day regular and different at the same time 😅 LOL IRS GREAT VIDEO ALSO!!!
Thanks for the great video. One question... If I have a roommate, do I deduct the whole rent or just what I pay for rent/expenses?
Question? Can you claim this deduction if you use your home office as a 1099 contractor?
So, I have seen something about renting the room for your office to your LLC as opposed to a home office deduction. How would that work?
Would working from home and writing off your office space destroy the separation of personal and business assets protected by an llc?
Also what if you run multiple llc’s from home working from the same office?
'cover' photo is why I watched the video. I'm in a small 1 bedroom apartment and I'd read there are actually ways to set up a small 'home office' in a corner in an otherwise used room. Cover photo had me thinking that's what this was about. Disappointed because contents don't apply to me.
I make TH-cam video in my bedroom. I’m pretty sure I can’t add my entire room since I sleep there… can I? I would think I can include just a portion on my room right?
@Karlton, we’re ALL taking care of business in the bathroom. Will the IRS count that?
I must say you legit had me reach enlightenment with taxes and owning a business. I haven’t been this inspired for years and thanks to your videos I’ve been able connect the dots and now have the confidence to start a business thus taking steps to my finical freedom. Legit putting everything you’ve taught me in action next year and using the rest of this year to keep learning and reaching so I can be successful once I start. Thanks to your teaching I’ll be able to pour more into my family and make my dreams come true. Please never stop offering this help/advice that you are giving out.
@Karlton - when you say the bathroom and closet can be used for business, does that mean it has to be exclusive used for business? My 2nd bathroom next to my home office has washer and dryer, can I count this?
🙏 Thanks God for you Karlton. 👍 This is blowing my mind. This is just what we need. You are so sent 📤 by God.
I'm subbing ‼‼‼
You're great at what you do‼‼‼ I'm not an accountant but I have a love for telling people what their deductions are 🥰
My mother owns multiple businesses and her accountant doesn't give her the best deductions
I'll send her your video.
Thank you for sharing
Great video !! Maybe I missed something but can you claim depreciation on your primary house ? I though you could only do that for rentals ? Thanks
This is dope! I'm currently on a mission to start a family LLC, and i wanted to start to prep for any TAX advantage strategy. which does and will include a HOME OFFICE.
This man is smart, he's showing us how to use 1 room as an office write off, meanwhile he's able to use the entire space as a write off since he's using the entire thing for his YT businesses (with video proof).
This needs to go viral, props to the very entertaining intro lol, thanks for including the bathroom I was wondering cause I wouldn't want to have a meeting and the bathroom was my private bathroom lol
$3800! Yikes!
If you had a desk in your room that is exclusively used for an online business, could you claim that space?
How do I do this deduction? My landlord wants his money, how do I tell him His money is not complete because of office tax deductibles
It's not a deduction of your rent payments to your landlord.....it's a deduction of tax bill. If you don't pay your landlord, he will evict you.
Too much time used for unnecessary things. Made it boring. Not to the point. Sorry.
Did you forget about ‘communications write offs… phones?
The Simplified Method AKA The Simpleton Method AKA The IRS Simp Method
Do all of the home bills have to be in my name and be paid out by the LLC business bank account?
If you've used the simplified method before, can you change to the other method in a layer filing?
Man how can I hire your services ? I am about to start in Trucking Business. I have been following you on all your info is always on point and easy to understand. Please let me know how I can contact you.
👍gave you a like on this informative vlog...thx man
Man this is good stuff, keep up the good work Bro!
Great video, but how about including a garage that you work out of too?
I do be doing business while doing my business in the bathroom lol.
Why do you include the hall way, closet and bathroom?
This is valid for a 1099 sole proprietor correct?
I'm impressed also but not with his website it's not secure
This video was abt 20 mins longer than it needed to be.
Mr Carlton,
What is HOA fees?
improvements are not write offs sadly only repairs
Yes I just became a 1099 worker who works from home
These comments reek of bots and paid comments
What if you have a home office and work shop?
Why are you running why are you running😂😂😂
Thank you!!!! You have a great teaching style . With simplified method it is $1,500 PER YEAR max deduction, correct? Hope you can make one more awesome video about the mortgagee deductions- how calculate depreciation, how subtract mortgage interest etc. I lost sooo much money in previous years since the professional TAX preparation specialist didn't mention me this expense.
Can you only take 1500$ total on the simplified method?
1500$ a month x 12 = 18000$
$1500 max for the year. If you use TurboTax, it will do that math for you and won't let you increase it.
Just what I needed! Thanks
LOVE IT LOVE IT LOVE IT
What about LLC owner w/ S corp paying self as W2?....Are all W2 employees excluded from home office deduction including proprietors?
As a new Business Owner, this is my first Tax Filing opportunity without a W2 income. Thank you so much for making this video and literally turning on the lights as to how the Home Office Deduction is supposed to work for my best interest. 👍🏽😉
Thank you excellent video. Can I wright my home office off if I also use a virtual address. Ie Regis, Davinci,
The real lesson here is to be suspicious of any instance when the government offers a "simplified" method of doing things. Anyone ever looked at a 1040-EZ form?
Great video, but it raises a question. I have a detached garage. There’s a room in the garage that I’d ideally like to use for my office space. Does this scenario work with the regular method? If so, how would I calculate that space since it’s separate from the actual home? Thanks for your videos!
Nice and clear. I love it!
Great information
Mr . Carlton
Would you tell if there is no washroom particularly to the office ( available is a sharing one at home). Does it still count as home office deductible? Very good lesson.
Thank you so much
Can you explain the deduction if you have a mortgage and rental unit? We need another example for those with multi families
LOVE this video.
Question.... what if my "home business" is being a landlord and renting out a portion of a home that i am taking a mortgage out on.
I will be living in the home and renting out a portion of the home to my family members.
3 out of 4 bedrooms are rented to my tenants
1 out of the two bathrooms are rented to my tenants.
Closet and hallway will be dedicated space.
Can i deduct the bathroom that is not being used by my tenants as part of my home office?
Say i use that bathroom only during my business hours & i don't let my tenants use that bathroom for their personal use
& i also dont use that bathroom for personal use either...
Would that be OK?
What if my home office is my shed?
Can you claim this home office deduction if you aren't really paying rent (but are really working from home, living with family.)
Hello Karlton Dennis,
I am a 15 year old boy aka Manav Patel. I have a really unique situation here for office tax deductions. So about 6 months ago my dad bought a small 11-room motel and we also have a joint house to this business and that is where we all live. Since it is a small house, I sleep in one small room with bed, it is more like an office usage for us so we use it for motel office and I almost everyday work or help my dad with everything. I wanted to know if I can deduct this much space which had been used for business as well as for personal usage. I am hoping for your reply or anybody who can help me with this.
Thank you.
question. business at home, I use a spare room for business and part of unfinished basement for storage of packing material etc. , Unfinished basement is not included in the square footage of a home. Can it still be a tax deduction? and if so how do you calculate it.
What about if you own a second home that's empty and being used exclusively for a mental health office? Can you use the entire home for the regular home office deduction? We also had the home rezoned as a home business in our county.
You had me at the 'headscratcher" - extra pantry space? broom closet? So many possibilities....
happy I found this page definitely going through your team to create my LLC & learn how to file my taxes thank you!!
Karlton I have a scenario that I dont think many if anyone has asked ya. What about "living in your business location?" As opposed to having (in this videos case) your business in your living space. Any real benefits? For example: no lease/rent to pay to live in yet have many expenses for upgrades that can be applied to the business process itself...all while living there.