Small business deduction info from the IRS

From the IRS:

Small business owners should find out if they can benefit from claiming this deduction

The home office deduction can help small business owners save money on their taxes. Taxpayers can take this deduction when they file their taxes if they use a portion of their home exclusively, and on a regular basis, for any of the following:

  • As the taxpayer’s main place of business.
  • As a place of business where the taxpayer meets patients, clients or customers. The taxpayer must meet these people in the normal course of business.
  • If it is a separate structure that is not attached to the taxpayer’s home. The taxpayer must use this structure in connection with their business
  • A place where the taxpayer stores inventory or samples. This place must be the sole, fixed location of their business.
  • Under certain circumstances, the structure where the taxpayer provides day care services.

Deductible expenses for business use of a home include:

  • Real estate taxes
  • Mortgage interest
  • Rent
  • Casualty losses
  • Utilities
  • Insurance
  • Depreciation
  • Repairs and Maintenance

Certain expenses are limited to the net income of the business. These are known as allocable expenses. They include things such as utilities, insurance, and depreciation.  While allocable expenses cannot create a business loss, they can be carried forward to the next year. If the taxpayer carries them forward, the expenses are subject to the same limitation rules.

Read more: https://go.usa.gov/xpgFv

Leave a Reply

Professional Certifications

Hours & Location

Mon-Th 8:30 am - 5:00 pm
(closed 12 - 1 pm for lunch)
Fri 8:30 am - 12:00 pm
Open all day Fridays during tax season:
Jan. – Apr. 16 and Sept. – Oct. 16
4004 Gateway Dr Ste 180
Colleyville, TX 76034
(817) 545-1277