I agree 100% with those who advise against deducting the home office. When I moved home in 2002 I worked out the deduction, which in my case would have been about $300/year. At 25%, I'd be able to reduce my income tax by $75, at the cost of filing the additional statement with my return and maintaining the records so that I could increase the capital gain if/when I sold the house. (Ed's right, anything you depreciate reduces the cost basis and increases your capital gain.)
So I said, how much accounting can I buy for $75? "Not much at all!" is the answer. So forget it. When I first started my own business, in 1981, my new accountant told me, "Please don't get into spending $500 on something to save $100 in taxes." It was good advice. Dan Covill > From: [email protected] > To: [email protected] > Subject: Re: [NF]: Pennsylvania Sales Tax > Date: Fri, 7 Mar 2014 20:39:23 +0000 > > On Mar 7, 2014, at 2:01 PM, Dennis Schuette <[email protected]> wrote: > > > I recently had the 'home office' discussion with my tax accountant. > > Apparently a recent rule change allows for a fixed deduction of $500/year > > with little documentation. It's similar to deducting the mileage rate > > (55.5 cents/mile, I think) instead of vehicle expenses. > > Of course, you may still track % of space and expenses if it's worth the > > effort. > > Also, remember that the deduction is actually a depreciation, so it reduces > the effective purchase price of the house. When you sell, the profit for tax > purposes is the sale price minus the purchase price minus any claimed > depreciation. So you might end up with a bigger tax bill later. > > > -- Ed Leafe > > > > --- StripMime Report -- processed MIME parts --- > multipart/signed > text/plain (text body -- kept) > application/pgp-signature > --- > [excessive quoting removed by server] _______________________________________________ Post Messages to: [email protected] Subscription Maintenance: http://mail.leafe.com/mailman/listinfo/profox OT-free version of this list: http://mail.leafe.com/mailman/listinfo/profoxtech Searchable Archive: http://leafe.com/archives/search/profox This message: http://leafe.com/archives/byMID/profox/[email protected] ** All postings, unless explicitly stated otherwise, are the opinions of the author, and do not constitute legal or medical advice. This statement is added to the messages for those lawyers who are too stupid to see the obvious.
