Tax time! Write off about four or five days to gather all the receipts and hand-written notes to yourself, so that your accountant can come close to organizing all those numbers into a coherent tax return for you.
OK, so most people are not thrilled with the need to make all this happen. But this time of year warms my heart, because there’s always some good news to come out of the inevitable list of tax law changes.
Here’s a good one. Beginning with the 2013 return (which you will file in 2014), the home office deduction will be a lot easier. A new rule, never before seen by an accountant in this country, reads that you do not have to gather all of the costs associated with owning or renting your home in order to take advantage of the space you use for your business. No more utility and service costs, no mortgage info or insurance premiums -- nothing. Just tell your accountant how much space you use.
True. The new rule allows you to multiply the number of square feet you use solely for business, up to 300 total, by $5.00. That’s your allowable deduction, if you choose. Maximum 300 feet x $5 per foot equals a $1,500 home office deduction. That’s it.
Of course, you still have the option of doing things the old way. You may benefit more financially if your space exceeds 300 square feet by some margin, or your home costs are much higher than the maximum deduction the easy method allows. It’s up to you.
And note that this is not available while you’re gathering your receipts for the 2012 year return coming due soon. It’s a year away.
But hey, good news is good news. Thought I’d pass it along.
Call me anytime for anything having to do with your home. I’m always here for you.
Enjoy the day,Mike Moger
Wright Kingdom Real Estate