In the past, complicated forms have made it difficult to claim a home office deduction with the Internal revenue Service. The tax bureau was quick to examine these claims for issues. However, that process will be much simpler when filing tax forms in 2014.

Simpler to deduct your home office

All entrepreneurs and small company owners who want to deduct rooms in their homes on their taxes will have it easier here soon. The IRS is simplifying the procedure.

In 2010, the most recent years statistics are available for, 3.4 million Americans claimed deductions for home offices, according to the Internal Revenue Service.

The tax code section 280A claims that a taxpayer can only count the room as a deduction if it is: „The principal place of business of a trade or business, as a place where you meet with patients, clients, or customers in the normal course of your business, or your work as an employee, but only if the use of the home office is for the convenience of your employer.“

Making it simpler

Taxpayers had to fill out the 43-line Form 8829 to figure out what part of the home is actually deducted for the business. This was really complicated and took a lot of work.

Taxpayers can take up to $1,500 in educations and $5 for every square foot of room for the deduction in 2014.

The IRS states the form will also be much simpler to understand and to fill out. The Internal Revenue Service states the move will save small business and entrepreneurs 1.6 million hours a year in paperwork and record keeping.

Praise for the tax code change

The National Association for the Self-Employed is pretty happy about the change, and so are others.

„This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy,“ said Kristie Arslan, who heads the group. „The previous calculation for the deduction was cumbersome and time consuming for America’s smallest business and year after year hard-earned dollars were left on the table.“

The changes will be put on 2013 returns filed in early 2014.

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