Answers
to Your Tax Questions
By Wayne M. Davies
Contributing Writer
Article Date: 03.11.03
Wayne,
I own a sole proprietorship web-based business and I recently bought a new
house. I utilize 13.5% of the living space as a home office. What can I write-off
from the list below since I utilize 13.5% of the living space as a home office:
1. Monthly mortgage
2. Annual home-owners insurance
3. All costs associated with purchasing the house (points
paid, closing costs, escrow fees, lender fees, etc)
4. Repairs that I constantly make around the house
Thanks,
Mark
Hi Mark,
Since your first name is the same as my middle name, I'm more than happy to
answer your question.
Assuming you qualify for the home office deduction, you can deduct 13.5% of
the following home-related expenses:
1.
Interest portion of the mortgage payments (but not the principal portion)
2. Property taxes
3. Homeowner's insurance
4. Utilities
5. Repairs & maintenance
6. Depreciation of the purchase price
Use Form 8829 to calculate the deduction, then transfer the total expense
amount to Schedule C, Line 30.
The home office deduction has gotten a lot of attention over the years. There
are several requirements that must be met to claim this deduction. I'm not trying
to scare you away, just making you aware that you should do your homework. Or
consult a tax professional, of course.
Form 8829 is not for the numerically-challenged. I strongly recommend you
do a little research on this. Read the form instructions carefully; IRS Publication
587 is also helpful.
Sincerely,
Wayne
About the Author:
Wayne M. Davies is
author of the new eBook, "The Tax Reduction Toolkit: 29 Little-Known Legal Loopholes
That Will Reduce Your Taxes By Thousands (For Small Business Owners and Self-Employed
People Only!) Don't file another tax return until you visit: http://www.YouSaveOnTaxes.com/toolkit.html
|
