Income Tax filing question

[CoMoChief]

I have little knowledge in this field, so any (serious) info/advice is appreciated. Comic relief is also appreciated...this is CP after all.

I'm getting ready to file my taxes as I've received all of my W2's 1099's etc. My job has changed and has allowed me to work from home from around mid Oct'14 to present day (or 12/31/14 of the 2014 filing year).

Now I still work for an employer fulltime, so this isn't some work from home business that I started up or anything. My employer gave me a workstation computer printer/scanner/fax, and a phone so I can do everything I can at the office, at home. They pay for the internet and land line for the fax.

My question is, are there any loop holes where I could write off any expenses like any electricity expenses? Not sure how I'd be able to break that down or provide proof or get an accurate figure of what the difference in my electric bill would be from when I wasn't working from home compared to what it was when I started working from home, if there's really any difference at all. Probably seems like a stupid question but again I know little to nothing about the subject, what you can write off/deduct etc. The more I've looked into this (google search), the more I'm thinking I won't be able to write off anything but every bit helps I guess.

[DaneMcCloud]

Originally Posted by CoMoChief

I have little knowledge in this field, so any (serious) info/advice is appreciated. Comic relief is also appreciated...this is CP after all.

I'm getting ready to file my taxes as I've received all of my W2's 1099's etc. My job has changed and has allowed me to work from home from around mid Oct'14 to present day (or 12/31/14 of the 2014 filing year).

Now I still work for an employer fulltime, so this isn't some work from home business that I started up or anything. My employer gave me a workstation computer printer/scanner/fax, and a phone so I can do everything I can at the office, at home. They pay for the internet and land line for the fax.

My question is, are there any loop holes where I could write off any expenses like any electricity expenses? Not sure how I'd be able to break that down or provide proof or get an accurate figure of what the difference in my electric bill would be from when I wasn't working from home compared to what it was when I started working from home, if there's really any difference at all. Probably seems like a stupid question but again I know little to nothing about the subject, what you can write off/deduct etc. The more I've looked into this (google search), the more I'm thinking I won't be able to write off anything but every bit helps I guess.

Find a recommended CPA. Don't try to do this yourself, or use Turbo Tax or ask CP.

[KC native]

Originally Posted by DaneMcCloud

Find a recommended CPA. Don't try to do this yourself, or use Turbo Tax or ask CP.

This

Turbotax is good if you have simple tax situations. Other than that, you should pay someone.

[ClevelandBronco]

http://www.irs.gov/Businesses/Small-...fice-Deduction

Requirements to Claim the Deduction

Regardless of the method chosen, there are two basic requirements for your home to qualify as a deduction:

1. Regular and Exclusive Use.
You must regularly use part of your home exclusively for conducting business. For example, if you use an extra room to run your business, you can take a home office deduction for that extra room.

2. Principal Place of Your Business.
You must show that you use your home as your principal place of business. If you conduct business at a location outside of your home, but also use your home substantially and regularly to conduct business, you may qualify for a home office deduction. For example, if you have in-person meetings with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business. You can deduct expenses for a separate free-standing structure, such as a studio, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or the only place where you meet patients, clients, or customers.

Generally, deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.

Additional tests for employee use. If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. You must meet the tests discussed above plus:

• Your business use must be for the convenience of your employer, and
• You must not rent any part of your home to your employer and use the rented portion to perform services as an employee for that employer.

If the use of the home office is merely appropriate and helpful, you cannot deduct expenses for the business use of your home.

For a full explanation of tax deductions for your home office refer to Publication 587, Business Use of Your Home. In this publication you will find:
• Requirements for qualifying to deduct expenses (including special rules for storing inventory or product samples).
• Types of expenses you can deduct.
• How to figure the deduction (including depreciation of your home).
• Special rules for daycare providers.
• Tax implications of selling a home that was used partly for business.
• Records you should keep
• Where to deduct your expenses (including Form 8829, Expenses for Business Use of Your Home (PDF), required if you are self-employed and claiming this deduction using the regular method).

The rules in the publication apply to individuals.

[CoMoChief]

Originally Posted by DaneMcCloud

Find a recommended CPA. Don't try to do this yourself, or use Turbo Tax or ask CP.

This is more than likely the course of action I will take. Just wanna get as much info as I can. Is a football msg board the place to start? Probably not ...but this place has discussions on all kinds of shit so who knows.

[CoMoChief]

Originally Posted by ClevelandBronco

http://www.irs.gov/Businesses/Small-...fice-Deduction

Requirements to Claim the Deduction

Regardless of the method chosen, there are two basic requirements for your home to qualify as a deduction:

1. Regular and Exclusive Use.
You must regularly use part of your home exclusively for conducting business. For example, if you use an extra room to run your business, you can take a home office deduction for that extra room.

2. Principal Place of Your Business.
You must show that you use your home as your principal place of business. If you conduct business at a location outside of your home, but also use your home substantially and regularly to conduct business, you may qualify for a home office deduction. For example, if you have in-person meetings with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business. You can deduct expenses for a separate free-standing structure, such as a studio, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or the only place where you meet patients, clients, or customers.

Generally, deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.

Additional tests for employee use. If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. You must meet the tests discussed above plus:

Your business use must be for the convenience of your employer, and

You must not rent any part of your home to your employer and use the rented portion to perform services as an employee for that employer.

If the use of the home office is merely appropriate and helpful, you cannot deduct expenses for the business use of your home.

For a full explanation of tax deductions for your home office refer to Publication 587, Business Use of Your Home. In this publication you will find:
• Requirements for qualifying to deduct expenses (including special rules for storing inventory or product samples).
• Types of expenses you can deduct.
• How to figure the deduction (including depreciation of your home).
• Special rules for daycare providers.
• Tax implications of selling a home that was used partly for business.
• Records you should keep
• Where to deduct your expenses (including Form 8829, Expenses for Business Use of Your Home (PDF), required if you are self-employed and claiming this deduction using the regular method).

The rules in the publication apply to individuals.

Thanks!

[AustinChief]

Originally Posted by DaneMcCloud

Find a recommended CPA. Don't try to do this yourself, or use Turbo Tax or ask CP.

Yeah definitely don't use TurboTax... but you don't necessarily need a CPA. Any full time tax professional should be fine. Just make sure they are a full time enrolled agent and not just some dude that does taxes.

[TribalElder]

I would be interested in knowing the answer to this

[DRU]

Basically, you would take the percentage that your home office space takes up in your home (eg. 1000 sq. ft. house, 100 sq. ft. office, 10%)

Then you could deduct 10% of your home expenses.

In your case, if you're only working half the time at home in this office you'd have to factor that in, too, so then you might get 5% deduction, for example.

That's just a quick run-down, and I would still recommend talking to a Tax Professional...not a CPA. CPA does not equal tax professional. A CPA can ensure your books are in order to give to a tax professional, but they are very different things.

[TribalElder]

Even if you are W2 not self employed or 1099

[cosmo20002]

The situation described by the OP would likely result in such a tiny deduction (if any) it likely wouldn't be worth it the hassle, especially considering that home office deductions are one of the red flags for audits.

[Miles]

No idea what it's like with the current IRS but home office at one point was a big red flag for audit risk because it was abused so often. Agree with the advice of checking with a good tax professional.

[Why Not?]

Originally Posted by cosmo20002

The situation described by the OP would likely result in such a tiny deduction (if any) it likely wouldn't be worth it the hassle, especially considering that home office deductions are one of the red flags for audits.

This. I work for myself and have a home office. Plenty of other places to find deductions. To little reward for potential pain in the ass risk.

[DRU]

Originally Posted by Why Not?

This. I work for myself and have a home office. Plenty of other places to find deductions. To little reward for potential pain in the ass risk.

Just depends on where you're at in the tax bracket. If you're right on the edge, a small deduction can bring you back down into the next lower bracket and save quite a bit.

You would need lots of other red flags popping up at the same time in order to have a problem. As long as you're being legit you'll be fine.

[Miles]

Originally Posted by DRU

Just depends on where you're at in the tax bracket. If you're right on the edge, a small deduction can bring you back down into the next lower bracket and save quite a bit.

Whether you cross into another tax bracket doesn't impact how your income below that is taxed. The higher rate is applicable only to the next dollar earned above that threshold.