GET. LLC is a proud member of the Manufacturers Agents
National Association (MANA). There sole
mission is dedicated to educating, protecting and promoting the multi-line,
outsourced sales function. They offer so
much to its members, we thought we would share this piece of advice from MANA on
taking an simplified office deduction:
"The Internal Revenue Service (IRS) has announced a
simplified option for taking a deduction for the costs associated with the
office if you have a business office in your home. If you have a business
office in your home, you know that the process for preparing the form to claim
a deduction has been a painful one.
The new optional deduction, capped at $1,500 per year based
on $5 a square foot for up to 300 square feet, should reduce your paperwork and
recordkeeping burden.
Currently, you have to fill out a 43-line form (Form 8829)
often with complex calculations of allocated expenses, depreciation and
carryovers of unused deductions. Under the new option, you cannot depreciate
the portion of the home used in a trade or business, but you can claim
allowable mortgage interest, real estate taxes and casualty losses on the home
as itemized deductions on Schedule A. These deductions need not be allocated
between personal and business use, as is required under the regular method.
Business expenses unrelated to the home, such as advertising,
supplies and wages paid to employees are still fully deductible.
Current restrictions on the home office deduction, such as
the requirement that a home office must be used regularly and exclusively for
business and the limit tied to the income derived from the particular business,
still apply under the new option.
The new simplified option is available starting with the 2013
return most taxpayers file early in 2014. Further details on the new option can
be found in Revenue Procedure 2013-13, posted on IRS.gov."
We strongly recommend if you have any additional questions,
please seek guidance from your tax professional. Deductions from your respective
home offices are important to your bottom line. Keep good records and keep on
building your business.