Home Office Tax Kit

Recordkeeping (receipts, statements, etc.) is the backbone of tax deductions...the HOE is no different. Recordkeeping for your home office expenses and deductions are covered in IRS Publication 587 (see video 14). Also, accompanying this lecture is the instructor's proprietary spreadsheet HOME OFFICE TAX DEDUCTION ESTIMATOR.

Do you take the "simple" or "safe harbor" method...or do you take the more involved "regular" method? This video covers this choice.

Your Home office expenses can be in 3 different categories. Category 1 is "Direct" or 100% deductible, category 2 is "indirect" or partially deductible (based on the home office usage %), and the 3rd category is "not deductible". Learn more in this lecture. Use the accompanying IRS worksheet if needed.

Very Important! You can not use the HOE tax deduction to create a tax loss in your business...it can only go to the limit of your net business income. However, any HOE that you do not deduct can be carried over and applied to the next year.

How can you deduct furniture and other equipment used in your home business? Find out in this lecture.

If your home office is in a residential property you own...you may be able to use depreciation which can be another powerful tax-saver. This lecture shows you how to take and to also understand the concept of "depreciation recapture" which you should discuss with your tax person. IRS publication 946 covers depreciation.

Heading over to the IRS website for more on depreciation info for your home business.

Visiting the IRS for info on the home office and related info.

Taking a quick tour of Publication 587…the foundational tax guide for this course.

This lecture goes through an example of a home office situation (Mary, Example 1). included with this lecture is a sample spreadsheet showing the data and also filled-in examples of Schedule C and Form 8829. The example shows a profit from the home business.

Description:

This lecture goes through an example of a home office situation (Joseph, Example 2). included with this lecture is a sample spreadsheet showing the data and also filled-in examples of Schedule C and Form 8829. The example shows the home office expense in a business net loss situation.

Do your HOE tax deductions the right way...

Do you think you qualified for a home office tax deduction in a prior year...but somehow missed taking it? No worries...consider amending your return by filing 1040X. You could go back up to 3 years. Form 1040X and instructions accompany this lecture. Discuss this with your tax advisor.

Is it possible that the Home Office tax deduction can lower your income to the point that you may get a refund of taxes you never paid? It has been done...but learn how it gets down properly. The Earned Income Tax Credit (EITC) is a refundable tax credit generally available for low-income taxpayers that qualify. The accompanying PDF gives you details to explore the possibilities of the EITC.

Because a legitimate home office is a proper business location, the home-based entrepreneur may qualify for deductible travel expenses such as business miles. See the accompanying mini-guide on travel from your home office.

This powerful strategy could give your business a nice tax deduction...while giving you tax-free income. It is called the Augusta rule and this lecture discusses it. See also the accompanying report for more details. mke sure you review this strategy with a tax advisor familiar with this strategy.

Using AI resources such as ChatGPT and/or Microsoft Bing's Copilot is highly recommended. The instructor's book AI Investing For Dummies has more AI ideas and strategies. Keep in mind that AI is not perfect yet so check with reliable sources online such as irs.gov and discuss any ideas or strategies with your tax advisor before you use them.

If missing the home office deduction is a big mistake...then not investing it for bigger long-term gains may be an even bigger mistake. As some of you know I wrote the book Stock Investing For Dummies and I do an investing course here at Udemy so I encourage you to check both out. See the accompanying spreadsheet that goes along with this lecture.

Thank you for participating in this course! I truly hope that you keep more of the fruits of your labor by regularly doing tax-reduction strategies in this course and in my companion course here at Udemy called HOW TO MAKE ANY EXPENSE TAX-DEDUCTIBLE. A new version of that course is coming in February 2025 so stay tuned. Make it a great year...