home office deduction question?

Question

if i use a portion of my home as a home office and deduct the expenses for it are there any pitfalls or traps that i should be aware of before beginning to take the home office dedcution

Answer 1

It can get kind of complicated. You will need to determine if your home office is used EXCLUSIVELY for the business or partially. That is, is the room used for anything else? You will also have to determine the square footage of the area to determine what percentage of the entire house is being set aside. Are there shared expenses, or bills that are common to your space and the rest of the home.

Answer 2

you will desire to be submitting the tax returns yourselves. through fact a assorted member LLC records as a partnership on sort 1065, till it elects to be taxed as a company, then records the two 1120S or 1120. So, submitting your taxes one after the other for a mulitple-member LLC isn't a criminal technique of submitting. you would be properly-reported to seek for professional counsel earlier you get this element screwed up worse than it already is. maximum therapy of earnings and costs are typical on the time of the transaction. in case you do no longer comprehend what you're doing from the initiating, there is not any way you could take income of tax reward, nor sidestep tax traps that exist with a corporation entity. workplace in living house? perhaps, perhaps no longer, finding on how issues are set up. you have arranged a apartment contract with the LLC, yet that demands know-how of the guidelines to pull it off.

Answer 3

1) If you are an employee, the home office must be for you employer's convenience, not yours.

2) You must have an area of the home that you use regularly and exclusively for your business/employment activity. There was a case were a home office was disallowed because the taxpayer kept records of stock transactions in the desk drawer. As such, he failed the "exclusively" rule.

Answer 4

read the rules, other responders hit high points. this has and still is a very hot button for IRS for both auditing trigger and just something they look at, so make sure this is an honest deduction that you qualify for.