Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I am interested in possible repercussions of not taking certain deductions:

I moved into my first home in 2004.

My gross 2004 income was 81% W2, 19% 1099.

The 1099 income is as a computer consultant. I work primarily at client sites but do research, documentation, some programming, billing and bookkeeping in my home office.

I have set up an office in my home that I feel meets the IRS tests for home office use (exclusive area, etc.)

Because the thought of an audit is unpleasant at best and home office is often spoken of as being an audit red flag I wonder about the advisability of using this deduction. I am still running the numbers both ways to see if there is a big enough reduction in taxes to make my partial year usage worthwhile.

My question: If I don't take any home office deductions this year are there any future repercussions? Particularly if I decide to reverse course and begin using the deductions in future years? Can the deductions be taken piecemeal (i.e.: portion of utilities but no house depreciation)? And again - any repercussions because of this?

Thank you,

Wayne
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement