Claiming home office on your taxes

[maggiew]

DH wants to claim his home office on our taxes this year. He legitimately uses the office for his business (web-based realty company) and we use it for nothing else. (He might surf the web there.) It has a desk, bookshelves, and a sofa. I'm hesitant because I have heard that this is a red flag for an audit. (We moved into a new house this year and he never had a separate office before.) It is a separate room with 4 full walls and a door.

Anyone have experience with this?

Thanks,
Maggie

 

[ROIE01581]

you can as long as he does not have another office to work from outside of the home.

 

[disneyandme]

We've never done it- though my DH uses his office exclusively for work- because we heard that it has tax implication when you go to sell the house.

 

[jennifer293]

We claim ours and have for 10 years. There is a bed in there and has been for 10 years, but in all seriousness if you are going to get audited they don't just show up at your doorstep one day so you would have time to get all the "nonallowed" stuff out of there.. Also claiming an office does not have to be a whole room it is just a space. You can claim the corner of your kitchen as long as business is conducted at that spot.

 

[maggiew]

you can as long as he does not have another office to work from outside of the home.

DH has a regular 9 to 5 job and has a desk in a cubicle kind of thing. But it is totally unrelated to his home business. Is that ok?

Maggie

 

[maggiew]

We've never done it- though my DH uses his office exclusively for work- because we heard that it has tax implication when you go to sell the house.

We don't plan to sell our house since we just bought it. But can you elaborate on this?

Maggie

 

[jennifer293]

I found this article and it may give you some insight on it:

http://homebuying.about.com/od/marketfactstrends/qt/SelfEmpResSale.htm

 

[mamalle]

I have claimed ours over the years with my consulting work. turbo tax figures it all out for me. this year since I made more I took it to a accountant to see what he says. I do have work from home for some of my jobs that I consult for and others I have to travel to.

 

[englishteacha]

Dh's only office is his home office. He's an IT consultant. We claim it on taxes and have for 6 years.

 

[msmayor]

We don't plan to sell our house since we just bought it. But can you elaborate on this?

Maggie

If you take a home office deduction, part of the deduction is depreciation on the percentage of your home's value used for the business.

When you sell the house, you must 'recapture' that depreciation as ordinary income and thus pay tax on it.

And you cannot simply say "I will take all the other expenses but not the depreciation so I don't have to recapture it". The IRS doesn't care one whit whether you took advantage of the depreciation deduction or not; you will be forced to recapture the amount of depreciation you were entitled to take, even if you didn't claim it.