Terrified About That Home Office Deduction?
Posted by admin on Oct 20, 2007
Plenty of people find themselves shaking in their boots when they consider whether or not to add that tax deduction of their home office to their tax return. After all, isn’t it an instant invitation to the Internal Revenue System to perform an audit?
Although this is commonly thought, it is not the case. If you know what you are doing with the deduction, then you can most definitely take advantage of it. The key is to be careful about what actually qualifies as a tax deduction.
Only use deductions that are strictly related to your business expenses. For example, if you are using your home phone for your business line, the IRS knows full well that you are probably getting calls that are personal as well. Instead, get a dedicated line for your business and claim that cost.
The fact is, few home offices cause an audit on the tax return in and of itself. Making unbelievable deductions can be a cause, though!