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IRS Announces Simpler Rules for Home-Office Deductions (Bloomberg News)
NASE National tax Advisor, Keith Hall, was interviewed by Bloomberg News on the IRS announcement of a simplified Home Office Deduction starting in the 2013 tax year. Dallas who is a tax adviser for the National Association for the Self-Employed. “You can save some money, save some time, some of the investment you make in Advil.”Read the full article here. IRS Announces Simpler Rules for Home-Office Deductions
U.S. taxpayers will be able to make a simplified calculation to claim up to $1,500 in home-office deductions, the Internal Revenue Service said.
The new rule will take effect for tax year 2013 and not the tax-filing season starting this month. Taxpayers will be able to deduct $5 per square foot for up to 300 square feet of a home office.
“This is going to give some flexibility,” said Keith Hall, an accountant in Dallas who is a tax adviser for the National Association for the Self-Employed. “You can save some money, save some time, some of the investment you make in Advil.”
Currently, according to the IRS, taxpayers must fill out a 43-line form to claim the deduction. Groups representing small businesses have been urging the government to simplify the rules, arguing that the complexity deters some eligible taxpayers from bothering to take the deduction.
Hall described the current rules as “unbelievably complicated” because they require business owners to separate expenses into different categories and analyze the depreciation of their home.
“This is a common-sense rule to provide taxpayers an easier way to calculate and claim the home-office deduction,” said Steven Miller , the acting IRS commissioner, in a statement.
The new calculation doesn’t change the underlying law that governs when taxpayers with home-based businesses can take deductions, and the IRS still will be able to conduct audits. To qualify for the deduction, taxpayers must regularly and exclusively use the space for a business.
According to the IRS, more than 3 million taxpayers claimed the home-office deduction in 2010.