The use of your home – regardless if you own or rent – usually can be deducted from your federal taxes. It is called the home office deduction. Not all home offices qualify for the deduction, so you must be careful to ensure that you meet IRS requirements. First, the space for your home office must be regularly and exclusively used for your business. If you set your laptop on an ironing board in the laundry room, that’s not going to cut it. Secondly, the home office must be the principal place of your business. The room is where you meet clients and talk to them on the phone about projects; it is where you do the bulk of your work. When taking the tax deduction, you have two options – the regular or the simplified method. The regular method involves determining the actual cost of running your business out of your home and might include burglar alarms, insurance, mortgage interest, rent, repairs, utilities and depreciation (more on that later). Typically, the deduction is based on the percentage of your home devoted to business use. So if you have a 2000-square-foot house and a 200-square-foot-room in it is your office, 10 percent of your home is used for business purposes. That means 10 percent of the insurance, mortgage interest, rent, repairs and utilities may qualify for a deduction. The simplified method is much easier to determine, reduces the amount of recordkeeping you must do, and actually may allow you to deduct more money than you could by using the regular method. All you do is multiply a prescribed rate by the allowable square footage of the office. So if the prescribed rate is $5 per square foot, and your office is 300 square feet, then you can deduct up to $1500. Professional Book Editor: Having your novel, short story or nonfiction manuscript proofread or edited before submitting it can prove invaluable. In an economic climate where you face heavy competition, your writing needs a second eye to give you the edge. I can provide that second eye. //
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