How are small business taxes treating you these days?
Are they negatively impacting your business? Silly question I guess, as taxes always negatively impact your business.
How about you?
Have you been missing out on taking the home office deduction because of the complexities of calculating it? If so, then listen up as there was a change announced yesterday by the Internal Revenue Service.
If you work from home, or even if you work outside your house, but you maintain a home office that you work out of when you are at home, and you haven’t been taking the home office deduction because of the pain in the rear that it is to calculate, then you’re in luck.
The IRS is simplifying the way that the deduction is calculated and starting in 2013 it is $5 per square foot of space used for your home office, and no longer a percentage of your house the number of rooms.
Sadly it doesn’t go into effect for your 2012 taxes, so you have to wait one more year to be able to take advantage of the change, but at least that extra $1,500 in your pocket is something to look forward to when you file you taxes for this year.
Small Business Taxes
From the office of the Department of the Treasury we get the following update that is intended to reduce the complexity of calculating the deduction and thus more small business owners that work from home will now be able to take advantage of it.
Today, many taxpayers who qualify for the home office tax deduction are not claiming it. The reasons often cited are that businesses and filers do not fully understand the provisions or find it too complicated to calculate the amount.
That is about to change.
As part of ongoing efforts by the Administration to reduce paperwork burdens, the Internal Revenue Service (IRS) announced today that it is providing a new, simpler option for calculating the home office tax deduction, allowing small business owners and employees who work from home and who maintain a qualifying home office to deduct up to $1,500 per year.
The IRS also expects taxpayers to save more than 1.6 million hours per year in tax preparation time from this simpler calculation method.
The new option allows qualified taxpayers to deduct annually $5 per square foot of home office space on up to 300 square feet, for as much as $1,500 in deductions. To take advantage of the new option, taxpayers will complete a much simpler version of the current 43-line form.
You can read the whole post on the Treasury website here.
As a side note, did anyone else notice that currently you have to file a 43 line form to claim the deduction? How obscene is that? At least that complexity is what the are working to eliminate.
Is this change going to allow you to start taking the home office deduction now? Will you be able to reduce your small business taxes?
Please post a comment below to let me know you thoughts, and as always don’t forget to Like this and Tweet about it to your friends.
Have A Prosperous Day!