How to Write-off the Home Office Deduction | Mark J Kohler
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- Опубликовано: 22 окт 2020
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Mark J. Kohler breaks down how to maximize the home office deduction! It's NOT A RED FLAG...Every business owner should be taking this Write-off!!
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thank you Mark happy to subscribe to you!!!
Nice video. Thank you!
Great message. Thank you for posting.
Thanks for listening
Thanks. Awesome video setup!
Glad you liked it!
Hi Mark, thanks for this quick and insightful video. I run a online business at home. If I use a primary room as my office and a portion of my garage for extra storage, can I use a portion of the garage as part of the deduction? And to clarify, I can use property tax as well for deduction? Thanks!
Love this
Great tip
Thank you for posting your videos. You always have great things to say and I am soaking up the information. I can't wait for tax time. My first year filing with my LLC.
You are so welcome! I am so glad you have found them to be helpful. I'm excited for you too. Keep living the American Dream!
Good video
You’re brilliant Mark! Ps: Go Ben Affleck 😂
Quick tip. Get your offer letter on your job to mention telework and client sites. 😁
Question on taking the deduction for more than one office if you have more than one business. I'm building an addition that includes office space for one business, storage space for a 'flipping' business, and a recording area for another business. 634 square feet for all areas. Whether I choose simplistic or standard, I can only write off one office area?
What about deducting for the cost of building a detached structure for office use?
Nice video
Great information. Is there a certain dollar amount that your business is required to generate in order to justify this deduction?
I’ve been looking for you and your $1M ROTH video!
Is this a one time calculation? Like for example, after u calculated the percentage, do u multiply that to how many months you worked there (if it wasnt a full year) or not?
Great video!Thank you for the valuable information you share!! Question: Will I be able to get the home deduction, even If my business is registered with a different address? (I'm thinking of using a virtual office address to register my DBA, EIN, Sellers permit & Business license, for privacy & safety of my home. Also, I'm just testing the waters so I'll be registering as a sole propietorship, not yet a business entity) ??
Yes you can. Remember he said you can only have one home office deduction.
Hi Mark. I have a landscape company where i have an office away from my residence, but all of my work and storage of my equipment is at my residence. Can i write off the section of my garage and driveway where my equipment is kept along with trailer and truck in the driveway? Thank You David
Does the software calculate the %? I feel like some of them include the full amount of utilities, mortgage interest etc
Great video!!!!
Ok I’m going to pick your CPA brain. I’m a realtor and use a spare bedroom as a home office. It’s probably a 10x10 room. Problem is that in that room I also have a reloading bench. IF I measured out only the office area, EXCLUDING the space or foot print of the bench , could I still write off the exclusive office space? I don’t care about the deduction per se, but as you know it would greatly help me with my mileage write off if I had a home office since the first and last legs of my day would not be seen as commuting. Did that make sense?
What about trading stocks/options/crypto? Does that apply to that as well? Is there a minimum amount of capital gains you need to meet in order to deduct an office space?
May I report the virtual office I use for meetings only as office expense?
What if it's the same room that you sleep at night? If I want to use the standard method, I should only divide the area that my desk is occupying in the room or I can divide the entire room by the entire house?
What about a partnership can each take deduction living different homes.?
Loss foe that year ?
I understand the “exclusive use” aspect but not the “regular use” requirement. Is that defined as a certain number of days per year?
What if your whole home is your office because you work in every room and you have am online business? Perhaps other workers come to your home and work as well? Is there a max % you can write off?
Can you do this for an INC?
mortgage interest ... what happens if you own the house , no mortgage??
Great information, but what form do I use? Where do I enter this in the 1040?
If you have a small business, yhis would be included in the Schedule C, bottom half
Are you able to claim home office if you are a employer not self employed in the state of CA?
I have two separate businesses in my home. I work out of an in home hair salon and I'm also a videographer and I work out of a separate office for that. Can I do the simplified version twice for each business or do I use the standardized version? I currently do not have an LLC but im thinking of doing that instead of sole proprietor, do you recommend that?
An LLC is advised for legal protection. Without an LLC, the person filing a lawsuit against you can reach into your personal assets more easily.
My accountants always discourage me from taking write-off to protect themselves. I have to force them. Annoying.
What if I wanted to use my large closet as an office and as a means of selling the clothes in it online?
If I have a home business and my wife has a home business (all in the same home), is it possible for us both get the home office deduction if we file separate or is it one deduction per house? Thanks Mark! Great video as always
You can have two home offices in the same personal residence. You could write-off either office under its own business. You just can’t write-off the SAME office space twice under two different businesses. Hope that makes sense. Mjk
@@MarkJKohler You are the man! Thank you sir
Can I do it with hotel rooms?
Hi Ben Affleck! I have heard the third method for home office deduction: number of rooms. Is that legit? If so, please help. Thanks,
How does depreciation recapture and the 250k capital gains exclusion on principal residence work together?
If you use the standard method the depreciation recapture will apply when you sell your home. You will get the sale of home exemption on the rest of the gain. You only have to worry about the recapture. Make sure you consult with your accountant before going down this path.
Actually the doctor lost his case. He was using his home office exclusively for administrative stuff, not facebook. The court said since he had an employer where he did most of his work, then he does not qualify for the exclusion. CONGRESS went back and rewrote IRC Section 280A(c)(1) to include administrative and management activities. You can't declare your kitchen as a home office. You can't declare any room that is not exclusively devoted to being a home office. I mean you can, but the IRS can pop you for it.
since March my work has allowed me to telework full-time. will I be able to write off a portion of my house since I'm working at home even if its not for a personal business ?
no. Home office is for self-employed individuals and goes on schedule c.
Any recommendations on a great CPA in Las Vegas? ☺️
Truebooks
What if we are a C-Corp?
Can't be easier, fantastic!!! Question: is this related to time, meaning, if I start my business in October, can I still take the total $1,500 deduction?
Yes, if you meet the other requirements. 😊👍
@@MarkJKohler Ok, what are the other requirements? 😏
I don’t understand the depreciation thing
What if I’m not a business owner
Does anyone know if the standard applies to 10% of total expenses for the year? Or is it just one month of expenses?
If you work all year, you get the deduction all year.
can you write off home office deduction when you are living with your parents and renting the 2nd floor of the house?
Yes
Since I spend 80% of my day in my vehicle driving around and I have a printer. Scanner, internet, surveillance security items, alarms etc....can my vehicle be considered administrative write off like your doctor story?
Technically no. BUT I would still write off A LOT if not all of the vehicle. Make sure and maximize that deduction. I have a recent article on auto on my blog at www.markjkohler.com. Check it out.
@@MarkJKohler driving 50k to 70k a year makes it a no brainer for millage deduction unless you think otherwise. Sole prop is entity.
It's a sickness that the 2017 Tax Cuts and Jobs Act doesn't allow W2 remote workers to write off their home office, utilities, supplies, equipment, furniture, services all required for their job that are very possibly not reimbursed by their employer (certainly not internet, phone, utilities, electric, etc) - exact same job for the same employer as a 1099 contractor gets the deductions. Madness.
do you need to have a profitable year to deduct home expense?
Yes
@@eduardoamezcuaea7919 Really? What if your real estate depreciation from rentals nets negative? you can still deduct home office right?
Do you need a specific form to do this deduction?
No sr. It is reported in the schedule C of your return if you are self emploed.
I have an LLC and I want to enclose my covered back porch and use it as my home office, can the expenses be a tax deduction?
It is hard for me to offer advice in a RUclips comment, but I would recommend reading my blog article on this topic: markjkohler.com/maximizing-the-home-office-deduction/ and if you have additional questions, I would reach out to my office, I am sure we will save you far more money than it will cost you. If you shoot my assistant an email whitney@kkoslawyers.com she will get you connected with someone who can help!
@@MarkJKohler thank you very much
Can you claim this deduction of you work for a company? Last year my company started work from home, and we have learned it is now permanent.
No, unless they pay you as self employed with a 1099.
Question about record keeping: aside from having a photo of all angles of the office, how can one definitively prove the room is being used as a home office? Exactly what type of evidence is required for the home office deduction upon an audit?
Can you quote the "administrative office exception" that was referenced in the video?
First!
Just got off the video call w/cpa he was riding a fear train all the way.
Most accountants are idiots and lazy. Thanks Mark for not being that.
Thank you!!
Can home office be your living room lol
You're encouraging fraud by mentioning the accountant scene. The space has to be solely and exclusively for business purposes. There can be no shared benefit and be eligible for deduction aside from day care space in a home. Further, the office has to be a principle place of business as defined by law. Further, the nerve center rule or administrative clauses require substantial and regular tasks. That means daily consistent activity, not doing books once a week or month. Almost no one does this or proves this with records. It also does not relieve the requirements that the space be solely and exclusively used for business. And in context to wage employment it had to be for the benefit of the employer, and not a convenience allowance for the employee.
You’re completely wrong. Obviously you missed my point about the “admin office”, which is current case law and allows you to bypass those two exclusive AND principal use rules for the administrative office exception. Yes Ben Affleck simplifies the process. But it is certainly not fraud. I’ve been teaching it for years. Study the caselaw on this and you’ll see. All the CE that I receive and I teach other CPAs around the country are in accordance with this opinion. By the way, I appreciate your comments and encourage them, but I’m offended you say fraud. Maybe ask, “Mark, what’s your basis for this opinion?” That’s the LAST thing I do. In fact I am a consumer advocate for watching out for fraudsters and helping put them away. Everything I teach is low risk and above board. Research my material more and buy my books. Thanks for the comment. Please follow up and I’ll do my best to reply
@@MarkJKohler my apologies for the insistence. However, by letting that go in the beginning without addressing that, you simply cannot do that because you use your kitchen table, you're letting a thought process marinate. If you open the can of worms I think it prudent to address the inconsistencies of the scene even if it makes the video longer. Also, no I didn't miss you point about the administrative office, and I addressed it clearly. Your follow up didn't address the substantial administrative duties required to be preformed. You completely bypassed that part of the comment. Because that IS the case law. It isn't to be construed as anyone that every does records here and there can take a home office deduction. It must be substantial. Substantial means daily. Someone who does books or records once a week or month cannot claim the home office as the administrative center. The separate nature of the space also applies... it is not relieved. There has to be an actual home office. Business use of home is only relieved on separate and exclusive assess in very few circumstances including home day care centers, using it for inventory etc. In general, you can't use the kitchen table for dinner and then to do books and records and deduct the square footage. Publication 587 goes all into this. It even gives examples of what constitutes the qualifying activity. I too am well versed in this. And the records you produce and activity go into the equation of allowance under audit. IF you show up with comingled, unprofessional records with scant evidence of the clear and consistent nature of your substantial administrative tasks performed, the deduction will not be allowed. No reasonable conferee or court of tax appeals would accept it. A rule like that allows the home office deduction when the office (which space used must also be substantiated under audit) is used as the administrative nerve center of the business. That nerve center then is considered a principle place of business to qualify for deduction. It also opens up the potential for erroneous claims when the activity does not support the deduction. The burden of proof always remains on the taxpayer. I guess my overall issue with the video is that the follow through was limited. Where do we disagree here? I'm sure we can pull the publications and IRC. If I remember the case you are referring to correctly, there was clear and daily tasks shown every day. I believe that's why the tests were developed. Citing the case is irreverent because we don't disagree on the ability to take a home office deduction under the administrative exceptions. The IRC was changes to allow it. What were talking about here is the facts and circumstances that would allow one to take the deduction. I guess I found the explanation too limited and it struck a nerve.
Excellent reply. Thank you so much for your thoroughness and exclamation. Very professional. I mean it. We probably don’t disagree on any substantive point. Yes, your right as well, I could also give a more detailed explanation in the video, but it is SO hard to get the average business owner to even listen or engage in a conversation about taxes, let alone such an in depth conversation. But again your point is well taken. I can do better. I guess I have to admit as well that I am probably a little more aggressive with home office than others. I truly believe that most small business owners sacrifice everything they have in their home and privacy to build their small business and the home office deduction is ridiculously low and far too stringent in application. In over 20 years, and tens of thousands of returns in our firm, we have never had it audited. That doesn’t justify fraud, but maybe a little more aggressive approach with circumstances justify it. Anyway, I’m probably rambling on. Thanks again for your follow up comment and kindness. The movie “The Accountant” still rocks! 😊😊
@@bk-xk4qh aren't you overlooking the situation where storing supplies (you mentioned inventory) it doesn't have to be exclusive? Was she storing the beads in the kitchen?
My wife works three days from home and our house is 💯 paid off. For the company that she works for. Can she still write off the use on taxes even though she goes to the office twice a week.