How much of a tax write-off is my house?

Question

I just bought my own home a few months ago and I am self employed, I was told that it would be a write-off on my taxes, but does anyone know about how much or what it depends on since I have my business in my home as well (I've always gotten a percentage off for that) I live in Nevada if that matters. Thanks!

Answer 1

I own a tax firm in Utah and I do several returns in nevada so what you are looking for is sort of complicated
if you use a portion of your house sq feet vs total sq ft then you can determine what % to use... normally I get about 10-20 %
then you take the interest, taxes, insurance, utilities and repairs. You have to use a form 8829 to fill it in.

Good luck but you can take it.

Answer 2

You can write off all the interest you pay and the taxes. If you just bought the house your payment is more than likely around 90% interest! So for every 100 dollars you pay, only 10 is going towards paying the loan down! It's just the way it is. If you want a real scare add up your monthly payments for the next 30 years and see just how much the house will cost you!

For instance I paid 160,000 for my house. I pay 1,150 per month. multyply that times 360 payments and you get 414,000 !! That's why if you pay an extra 40 or 50 dollars you are in fact "Doubling" your house payment.

As for the business in your home you must use it exclusivly for that purpose. ANd then you can write off the percentage of the house payment equal to the percentage of your house the business occupies. So if it is 15% of the total square footage of your house then you can write off 15% of the payment.

Just be aware that if you ever sell the house they will tax 15% of the profit you made off the house at a higher rate to get the money back then since you never paid taxes on that portion of the house. Pay for a good accountant and they can find the best way to deal with this. If you are going to sell your house in the future it may be better off to not claim the business use.