Re: home office deduction

YOu got that right. Big business can rape, pillage, lie, and steal - and it's all okay. God forbid small business person takes a 26 dollar allowance for a gift


Barbara Carlson wrote:
Every time I hear how this administration (or any other, for that matter) helps the small business person I just choke! Lies, lies, lies.

Barb C.
"RaeMorrill" <RaeMorrill@xxxxxxx> wrote in message news:s56Ff.5009$1N5.4547@xxxxxxxxxxxxxxxxxxxxxxx

Since when does the gummint operate under any kind of common sense. I probably COULD take my full Road Runner bill, but I don't because my DH also uses it for his computer


Su wrote:

But it's all connected. Each relies on the other. I can't have the DSL line unless I have the basic phone service.

You'd think the government would be more supportive of this considering the fact that I'm paying $120 with the phone/DSL/AT&T setup working 24/7 than I am paying $292/month (more or less) working only 7 hours a day.



"RaeMorrill" <RaeMorrill@xxxxxxx> wrote in message news:Go4Ff.4710$1N5.2065@xxxxxxxxxxxxxxxxxxxxxxx


I'm sure you can deduct the DSL, etc, but not the basic part of the phone bill - legally. I deduct a portion of my Road Runner, and that's billed as part of the cable TV package the way we get it, but I can't deduct the HBO

Su wrote:


I'll take it one step further ... a basic phone line ($25/month) is required in order to get the DSL line ($59.99/month), and the DSL line is required in order to use AT&T CallVantage ($35/month), which is my carrier unlimited long-distance (total $119.99/month for all three). Without AT&T CallVantage, I would need the a second phone line ($25/month) and also use to use a service like OneSuite, which is $0.029 cpm (x 60 minutes = $1.74/hour x 7 hours/day = $12.18/day x 22 days/month = $267.96 + $25 = $292/month total).

I'll take what's behind door #1.



"RaeMorrill" <RaeMorrill@xxxxxxx> wrote in message news:c_VEf.6139$5Q3.1902@xxxxxxxxxxxxxxxxxxxxxxx



http://www.powerhomebiz.com/vol22/taxdeduction.htm

Certain expenses are deductible whether you use a home office or not. Take telephones, for example. The rule is that the basic local telephone service change, including taxes for the first telephone line in your home is a nondeductible personal expense. However, if you do business long distance phone calls on that line, you can deduct it as part of your business expenses. If you get a second phone line in your house exclusively for your business, you can deduct this as a business expense.



Laura Gibson wrote:



You can deduct up to 2 phone lines. I deduct 1 cell and 1 home line as I receive faxes, etc, on this line also. Since the kidlings are gone, there is nobody on the phone anymore during my working hours except me.

Laura

"RaeMorrill" <RaeMorrill@xxxxxxx> wrote in message news:itTEf.6131$5Q3.4271@xxxxxxxxxxxxxxxxxxxxxxx




It adds up - you can take (I believe) percentage of all household expenses such as heat, electric, maybe even painting house. Phone I don't think because I believe you cannot deduct primary phone line as biz expense (I have a specific biz line I can deduct 100%of).

That's 140 square feet. 270 sq feet would be 10% so that's a little less than 5%?

Su wrote:




Hmmm ... I didn't think much about size being an issue. Boy, this is going to be tough to figure out. What about 10 x 14 in a house that is 2700 sq ft (upper and lower floors)? Is that worth claiming the deduction?



"Maureen" <maureen.galvin@comcastdotnet> wrote in message news:tLadnUvGW53RTX7enZ2dnUVZ_t6dnZ2d@xxxxxxxxxxxxxx





Yes, that is what my account explained to me also. I use to take the home office deduction when I had an office worth deducting. But now in my place, the square footage, etc. just doesn't make it worth my while any longer.

Maureen

"Su" <no.name@xxxxxxxxxxx> wrote in message news:7YPEf.15831$s9.3333@xxxxxxxxxxxxxxxxxxxxxxxxx





Just to make sure I "get it" ... it's okay to claim the home office deduction UP UNTIL two years before a house is sold. Once you reach that point, stop the deduction. Right?


"Laura Gibson" <transpec3@xxxxxxxxxxx> wrote in message news:WcadndGNNrQ6V37enZ2dnUVZ_sqdnZ2d@xxxxxxxxxxxxxx





I do take the home office deduction. My accountant warned me long ago about the two-year dealie, so no spur of the moment buys for me...Have lived in the same house for 29 years though.

Laura

"Su" <no.name@xxxxxxxxxxx> wrote in message news:DJPEf.15830$s9.12136@xxxxxxxxxxxxxxxxxxxxxxxxx





I got this from www.irs.gov

Paying Taxes on the Home Office Share When You Sell Your Home

When you sell your home, the home office may be considered business property, and that portion of your gain on the sale may be taxed, because business property does not qualify for exclusion

from income tax, as a personal residence gain. This situation

can

occur if you use your home for business in the year of the sale, or if you don't meet the "two-year test" (in which 100% of the residence was used as your main home for an aggregate of 730 days in the last five years). If this applies to you, you must treat the sale of your home as two transactions: one as the sale of business property and the other as the sale of your personal residence. The sale of business property is a taxable transaction that you must report, and unfortunately, any gain that results isn't eligible for the $250,000 home sale gain exclusion.

If you own your home, any depreciation taken after May 6, 1997 must be "recaptured" at the time you sell your residence for a profit, which means that the depreciation must be taxed at a special 25% rate. The rest of any gain that you have from the sale of the business portion of your home will generally be taxed at 20% (assuming you owned the home for more than a year).



So, according to this there's no problem claiming the home office deduction until a year or two before you sell your home. After that time, you should stop.

What's the general concensus here about claiming the home office deduction? Do you do that? Have you sold a home and had to repay the IRS any money?






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Relevant Pages

  • Re: home office deduction
    ... I deduct a portion of my Road Runner, and that's billed as part of the cable TV package the way we get it, but I can't deduct the HBO ... Certain expenses are deductible whether you use a home office or not. ... However, if you do business long distance phone calls on that line, you can deduct it as part of your business expenses. ... you must treat the sale of your home as two transactions: one as the sale of business property and the other as the sale of your personal residence. ...
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  • Re: home office deduction
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  • Re: home office deduction
    ... I deduct a portion of my Road Runner, and that's billed as part of the cable TV package the way we get it, but I can't deduct the HBO ... Certain expenses are deductible whether you use a home office or not. ... However, if you do business long distance phone calls on that line, you can deduct it as part of your business expenses. ... you must treat the sale of your home as two transactions: one as the sale of business property and the other as the sale of your personal residence. ...
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  • Re: home office deduction
    ... God forbid small business person takes a 26 dollar ... I deduct a portion of my Road Runner, ... Certain expenses are deductible whether you use a home office or not. ... you must treat the sale of your home as two transactions: ...
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