By FOX Business Posted here July 26, 2013
Claiming home office deductions can be intimidating, but many eligible business owners are leaving money on the table out of doubt and fear of auditing, says tax consultant Margaret Munro. To simplify the process, the IRS has announced a new safe harbor provision for taking home office deductions for the 2013 tax year. This allows at-home workers the option to simply take a deduction capped at $1,500 per year based on $5 a square foot for up to 300 square feet. The requirement that home office space be exclusively used for business and limitations on income earned from that business still applies, and direct business expenses unrelated to the home (advertising, supplies and wages paid to employees, etc.) are fully deductible.
Commentary from Bob Karp, Karp Properties LLC: Home office deductions can be great for some home owners, however there are restrictions and when you sell your home, tax consequences. No matter how good the information you find on the internet, always consult with your tax preparer.