Make the Most of Your Home Office Deductions

    Did you know you can save money on your taxes by writing off various costs through a home office deduction? Those who are self-employed or work a remote position out of their home can now deduct various home costs, which may include utilities, taxes, repairs and even associated rent.

    It is important to know how the process works and how to make the most of your home office deductions, however, to ensure you follow the regulations and save the most amount of money through home office deductions this year.

     

    What is a Home Office Deduction?

    A home office deduction is a write off on your taxes available to those who use a certain part of their home exclusively for work-related purposes. The premise behind the deduction is that those who work from home- typically either those who are self-employed or work a remote position – have increased costs that others who leave their home for work would not have to pay.

    Home office deductions allow you to save more than $1,000 when it comes time to do your taxes each year. If you have a room in your home that is used only for work, then you should most certainly write off your additional expenses.

    How Do Home Office Deductions Work?

    The way home office deductions work is fairly straightforward, although there are two approaches you can take to calculating your write off. The first and more simple approach is to calculate the square footage of your workspace. You are awarded $5 for each square foot. For example, if your home office is 250 square feet, you can save up to $1,250 on your taxes.

    The more complex method is to calculate your exact additional costs, which may include repairs, increased utility payments, etc. Of course, you can always attempt both methods and apply the one that allows you to save the most amount of money.

    Who is a Home Office Deduction for?

    A home office deduction is for anyone who works from their home, whether it is an entrepreneur conducting day-to-day operations for their business or an accountant who spends much of their time working from home rather than at the firm. If you have a room in your home used only as an office, you are likely eligible.

    However, the room must only be used for work purposes, which means a guest bedroom that has a desk you work at does not qualify for a home deduction. Since the home office must be used exclusively for work, it is a good idea to keep the room free of home items.

    Save Money Through Home Office Deductions

    Many who work from home are saving money each year through home office deductions, and you can do so as well if you have space in your house dedicated for work purposes. Whether it is a write off for a new paint job or saving money on utility costs, home office deductions are something everyone who works from their house should consider.

    EXIT Realty Bob Lamb & Associates is Murfreesboro’s most innovative real estate team.

    EXIT Realty Bob Lamb & Associates
    2630 Memorial Blvd, Murfreesboro, TN 37129

    (615) 896-5656

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