Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Next Thread
Author: PJGeorge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121451  
Subject: Telecommuting Deductions Date: 7/26/1999 9:33 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I have been working at home (telecommuting, but I work for GTE) for the last year and a half and I am considering revising my 1998 tax return to deduct the use of my home for work. I will also do this for 1999 but I will only be working at home from Jan - Aug. I am changing jobs at the end of Aug.

My question is: What can I safely deduct?

My home office is 90 sq ft, which represents 6.6% percent of my home. I can confidently say that this office area is only used for work purposes.

This is the list of deductions I think I can deduct, please add or subtract from this list: (PS> These are things I pay for myself)

6.6% of my mortgage (priciple only since the interest is already deducted)

6.6% of my utility bills (Gas, Electric, Water??)

6.6% of my Home Insurance??

Anything else? Any help would be greatly appreciated.

Thanks,
P.
Print the post Back To Top
Author: zorloc Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17668 of 121451
Subject: Re: Telecommuting Deductions Date: 7/26/1999 12:49 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Sounds good to me, but be careful which utilities you deduct. A primary phone line is usually not allowed to be included.

One thing to consider is that if you deduct part of your house cost (mortgage principal), when you sell your house that percentage will be OUTSIDE you excemption. In a simple example where you sell your house after you have paid off the mortgage: say your house sells with a gain of $100,000, 6.6% is $6,600. Even though you can excempt $500,000 (for a married couple), the portion used for a home office cannot be excempted. So you would have to pay capital gains on the $6,600, which at 20% is $1,320.

Of course if your gain will be more than $536,000 then there is no down side since your 6.6% for the Home Office will be above the excemption ceiling anyway...

jbw

Print the post Back To Top
Author: TaxService Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17671 of 121451
Subject: Re: Telecommuting Deductions Date: 7/26/1999 2:05 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
ave been working at home (telecommuting, but I work for GTE) for the last year and a half and I am considering revising my 1998 tax return to deduct the use of my home for work. I will also do this for 1999 but I will only be working at home from Jan - Aug. I am changing jobs at the end of Aug.

My question is: What can I safely deduct?

My home office is 90 sq ft, which represents 6.6% percent of my home. I can confidently say that this office area is only used for work purposes.

This is the list of deductions I think I can deduct, please add or subtract from this list: (PS> These are things I pay for myself)

6.6% of my mortgage (priciple only since the interest is already deducted)

6.6% of my utility bills (Gas, Electric, Water??)

6.6% of my Home Insurance??

Anything else? Any help would be greatly appreciated.


***The most important thing is to determine whether or not you qualify to take any deductions. The rules are modified for tax year's beginning after 1998. But, generally, the following holds true. If you do qualify, all expenses related to the business use percentage are deductible. 100% of the expense attributable to the space (repairs, etc.) is deductible as are furnishings, equipment, supply, etc.


***To deduct expenses related to the business use of part of your home, you must meet specific requirements. Even then, your deduction may be limited.

To qualify to claim expenses for the business use of your home, you must meet the following tests.

Your use of the business part of your home must be:
Exclusive
Regular,
For your trade or business, AND
The business part of your home must be one of the following:
Your principal place of business,
A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or
A separate structure (not attached to your home) you use in connection with your trade or business.

Additional tests for employee use. If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. You must meet the tests discussed earlier plus:

Your business use must be for the convenience of your employer, and
You do not rent all or part of your home to your employer and use the rented portion to perform services as an employee.

Whether your home's business use is for your employer's convenience depends on all the facts and circumstances. However, business use is not considered to be for your employer's convenience merely because it is appropriate and helpful.

Definitions are more completely found at URL:

http://www.irs.ustreas.gov/prod/forms_pubs/pubs/p58701.htm

"Jack"

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: edcosoft Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17702 of 121451
Subject: Re: Telecommuting Deductions Date: 7/27/1999 4:05 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I have been working at home (telecommuting, but I work for
GTE) for the last year and a half and I am considering
revising my 1998 tax return to deduct the use of my home for
work. I will also do this for 1999 but I will only be working
at home from Jan - Aug. I am changing jobs at the end of Aug.

My question is: What can I safely deduct?


First, get Pub 587 which answers all these questions, but:

My home office is 90 sq ft, which represents 6.6% percent of
my home. I can confidently say that this office area is only
used for work purposes.


That's not the only requirement.

This is the list of deductions I think I can deduct, please add
or subtract from this list: (PS> These are things I pay for
myself)

6.6% of my mortgage (priciple only since the interest is
already deducted)


You CAN'T deduct the mortgage principal, only the interest, which you must deduct from the mortgage interest you already take. No advantage here.

You CAN, however, take depreciation on the 6.6% of home value (less land) and when you sell the house maybe pay tax on that recapture.

6.6% of my utility bills (Gas, Electric, Water??)

6.6% of my Home Insurance??

Anything else? Any help would be greatly appreciated.

Thanks,
P.

Yes, all direct upkeep of business area, and 6.6% of all other EXPENSES, not capital.
Also must take 6.6% of taxes, which you must deduct from the taxes you already are able to deduct. No advantage here.
Hardly worth it, is it? See Pub 587 for details. Ed

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Next Thread
Advertisement