Working class individuals who want to claim deductions for their home offices -- a move that is notorious for raising red flags with the Internal Revenue Service -- will find an easier go of it under the revised tax code for 2013.
A brand new home office deduction
The process of deducting a room as an office in a home is really complicated, according to the Internal Revenue Service. That is why the process will be made easier.
There were 3.4 million Americans in 2010 who deducted a home office on their taxes.
The tax code section 280A says that a taxpayer can only count the room as a deduction if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or consumers in the normal course of your business, or your work as an employee, but only if the use of the home office is for the convenience of your employer."
Once troublesome process simplified
It used to be that people would spend hours filling out Form 8829 to be able to figure out how much of the home might be deducted from taxes. It was a long process.
In 2014, those calculations will be made simpler. Taxpayers can claim $5 for every square foot of the room for up to 300 square feet, or $1,500.
The Internal Revenue Service feels accomplished and like it has saved taxpayers millions of hours of complicated paperwork with the change.
Everyone happy over it
The change has gotten a lot of good press, especially from the National Association for the Self-Employed.
"This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy," said Kristie Arslan, who heads the group. "The previous calculation for the deduction was cumbersome and time consuming for America's smallest business and year after year hard-earned dollars were left on the table."
The 2013 returns field in 2014 will be the first returns to handle the situation.
A brand new home office deduction
The process of deducting a room as an office in a home is really complicated, according to the Internal Revenue Service. That is why the process will be made easier.
There were 3.4 million Americans in 2010 who deducted a home office on their taxes.
The tax code section 280A says that a taxpayer can only count the room as a deduction if it is: "The principal place of business of a trade or business, as a place where you meet with patients, clients, or consumers in the normal course of your business, or your work as an employee, but only if the use of the home office is for the convenience of your employer."
Once troublesome process simplified
It used to be that people would spend hours filling out Form 8829 to be able to figure out how much of the home might be deducted from taxes. It was a long process.
In 2014, those calculations will be made simpler. Taxpayers can claim $5 for every square foot of the room for up to 300 square feet, or $1,500.
The Internal Revenue Service feels accomplished and like it has saved taxpayers millions of hours of complicated paperwork with the change.
Everyone happy over it
The change has gotten a lot of good press, especially from the National Association for the Self-Employed.
"This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy," said Kristie Arslan, who heads the group. "The previous calculation for the deduction was cumbersome and time consuming for America's smallest business and year after year hard-earned dollars were left on the table."
The 2013 returns field in 2014 will be the first returns to handle the situation.
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