Many homeowners know that having an office in the house can be a deduction under certain circumstances. Traditionally, if something gets red-flagged for audit of a homeowner’s deductions, it is the one for a home office. Yet, if deducted correctly, it can be as safe a deduction as the more typical ones. Homeowners can deduct a percentage of their mortgage, utilities and home repairs in direct proportion to the amount of their home that is set aside as office space.
For this deduction to work, here are a few guidelines when deducting your home office expenses on your tax return:
· It must be your principal place of business (the main place where you get most of your work done)
· It must be used exclusively for business (No TVs, no video games, no craft corner.)
· It must be regularly used for business
· The size and use claimed needs to be realistic. Six hundred square feet in a 1200 square-foot house may not be realistic.
As of 2013, the IRS has simplified the method of computing business use of your home. The standard method used previously had been complex easily misunderstood by small business owners that felt it was too burdensome and problematic. Also, a reason for the reputation of the deductible has as an audit-magnet. The IRS claims the new simplified option can “significantly reduce recordkeeping burden by allowing a qualified taxpayer to multiply a prescribed rate by the allowable square footage of the office” in lieu of determining actual expenses. For a full explanation of tax deductions for your home office refer to Publication 587, Business Use of Your Home .
As a homeowner using this new option, you will not be able to depreciate the part of the home you use in your business. Yet, if you are a homeowner who itemizes your deductions, you can still claim mortgage interest, real estate taxes and any casualty losses on their home on Schedule A.
If you use the simplified option, you can write off $5.00 per square foot up to 300 square feet of home-office space. If your home office is more than 300 square feet, or if you want to take a depreciation deduction for the office space, then you will want to use the standard option. And, if you still want to depreciate the office space in your home, you will need to continue to use the standard option for such detailed calculations.
Be aware, when you sell your house, you will have to pay back any depreciation you took and it’s taxed at around 25%. Since the ‘90s, federal tax law has permitted homeowners to exclude from tax up to $250,000 per person in profits from the sale of a personal residence that has been lived in for at least two of the five years prior to its use. However, the space or room in your home that you dedicated to business use and depreciated must be “recaptured” when you sell as it does not qualify for the home sale tax exclusion.
The new home office deduction is simpler but smaller. However, as we’ve seen above, the added savings from keeping the additional records and claiming depreciation may not be worth the effort to hold out for the larger portion from the standard method. The home office deduction is easier to claim for the 2013 calendar year, but you won’t be able to use the simplification until you fill out your tax return in 2014.
This new construction is just a short paved walk to the beach and is located in a beautiful new development behind Redfish Village in Blue Mountain Beach. This house has 3 bedrooms, each are complete with their own bathroom and there is a full size office area in addition to the bedrooms. The master suite is located on the first floor and opens to a screened in porch area with an outdoor kitchen and outdoor shower. This house is close to a bank, spa, beach services, an ice cream store and restaurants.
This amazing condo at Sterling Shores has stunning views of the Gulf of Mexico. Two large master suites and a lock-out suite with its own entrance would make a great rental investment or a permanent residence.
Upgraded granite counter tops, cherry wood kitchen cabinets and upscale designer furniture enhance this spacious floor plan. Located within Sterling Shores you can enjoy the private beach club, a 4500 sq ft heated tropical pool with bbq grill areas, a surround-sound theater, high speed internet and on-site rental management.
This condo is close to many popular restaurants, shopping centers and family amusement centers.
For those who love the game of MONOPOLY®, check out the latest edition that has come to the emerald coast. MONOPOLY®: Visit South Walton Edition has properties that are unique to South Walton’s neighborhoods, events, unique galleries and restaurants that have replaced the traditional Boardwalk and Park Place properties.
Game pieces are represented by South Walton icons including a YOLO board, a sea turtle, a vintage beach 4×4, a beach cruiser bicycle, a dog dragging its leash and an Alys Beach Butterfly. This game retails for $39.95 and can be bought online or at local retail stores.
Come out and support the Alaqua Animal Refuge tomorrow – Sunday, August 25th from 11am to 2pm at Hibiscus Coffee & Guesthouse in Grayton Beach. This fundrasing event, “Mimosas for Mutts” will help with the costs when the facility was asked by the Walton County Sheriff Office to take in nearly 100 dogs and 6 horses after an animal abuse investigation. This has put the facility at maximum occupancy in just a few days and the dogs cannot be adopted until the ongoing criminal case has been resolved.
Alaqua is also in need of Sheets, Laundry detergent, bleach, Large, heavy duty garbage bags, paper towels, Pedigree canned adult and puppy food and Pedigree Little Champions pouches of food (pate style preferred). Supply donations and monetary support can be made to Alaqua at the Hibiscus event or be taken to 914 Whitfield Road in Freeport.
Overlooking the majestic dunes and East Pass is a fabulous fourth floor unit that has amazing views of the Gulf of Mexico. Look out the windows in the Master bedroom, kitchen and living area directly at the Emerald Waters of the Gulf.
This low density complex is located in the gated community of Destin Pointe and comes fully furnished with plantation shutters.
Magnolia Community has a 24 hour gate guard, covered parking, beachside pavilion with a swimming pool and hot tub, shuffle board, tennis courts and a shuttle to the beach and the two beautiful lakes. This condo has one of the best locations in Destin.
Art by Robin Wiesneth (Photo taken at Retail Therapy)
Mark your calendar for this years Baytowne Art Walk on August 30-September 1, 2013.
The event is from 5-10 every night and will feature local musicians and regional artists.
Come and enjoy folk art, frames, fine art, original jewelry and live music. Plenty of fun for the entire family!
Art by Robin Wiesneth (Photo Taken at Retail Therapy)
Located in a gated community is a stunning Mediterranean style home that overlooks Lake Destiny. The 23ft foyer opens to a grand staircase with beautiful wood and metal detailing.
The fireplace in the family room is a place where friends and family can gather and spend fun evenings at home. The kitchen has plenty of space including an island and breakfast bar. A gas stove, granite countertops, stainless appliances, natural hardwood floors, Spanish tile and a butler’s pantry create the ultimate cooking experience.
Leisure time can be spent in the media room that is adjacent to an oversized balcony or you can retreat to the den for a little quiet time. This magnificent house also has an enclosed pool that overlooks the lake. This four bedroom house is located in a family friendly community in Destiny West .
Located at Sterling Sands is a 2 bedroom, 2 bath fully furnished condo that would make a great rental property. Beautiful faux finishes and designer cabinets are just a few of the upgrades this condo includes.
An outdoor balcony extends from the living area to the master bedroom and has ample space to entertain with friends and enjoy the Gulf of Mexico. Located directly on the white sand beaches, Sterling Sands has wonderful amenities that include a tropical pool with hot tub, outdoor bbq grill area and a fitness facility.
Located in the heart of Destin, Sterling Sands is close to Ruths Chris Steak House, Destin Commons, Silver Sands Outlet Mall, Harbor Docks Restaurant, Golf Courses, Charter Boat fishing and many more entertainment options. This piece of paradise is an excellent investment opportunity!