Small-business owners, entrepreneurs and employees who work from home could save big money on their taxes by taking a home office deduction, as long as they meet the IRS’ requirements and keep good records.
If you use part of your home regularly and exclusively for business-related activity, the IRS lets you write off associated rent, utilities, real estate taxes, repairs, maintenance and other related expenses.
However, the biggest savings can come from an unexpected source.
Mileage deduction, by taking a portion of your home as a home office, this grossly increases your deductible business mileage. Everyone commutes, if you are an employee or owner, you have a commute. Commuting is defined as the travel from your home to the first business stop and from the last business stop home. If you only go to one client a day, you don’t have any business mileage, as this is considered your commute. If you have a home office then you walk your commute to and from the office, making all that mileage tax deductible. The standard mileage rate is 53.5 cents a mile, so every 100 miles is a deduction of $ 53.50 !!
For more information please contact
Financial Focus Advisory Services, LLC
Leo Leydon, CPA and Investment Advisor