Maximizing Home Office Deductions

Author: Eva Rosenberg

CPE Credit:  2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC

This course addresses the truths, myths and ‘red flags’ related to home office under the Tax Cuts and Jobs Act (TCJA). You’ll learn how to help your clients maximize their deduction; when to use the Simplified Option – and when not to use it; how to protect the deduction for the long term; and when it’s important to fight for it, even if the deduction is small – and when not to use it at all. And why it’s a valuable deduction even for a business that has losses for years.

Publication Date: February 2019

Topics Covered

  • Rule of Thumb
  • Documentation
  • New Business
  • Home Office Benefits
  • Home Office Disadvantages
  • Shared Office Spaces
  • Red Flags
  • Tax Court
  • IRC 280A
  • The IRS Office in Home Flow-Chart
  • Administrative Activities
  • Employees Who Work at Home
  • Convenience
  • Business Limits
  • The Alternative - Simplification
  • Schedule C and Simplified Deduction
  • Simplification— Benefits to Clients
  • Simplification— Depreciation
  • Simplification— Down Side
  • 2018 Strategy
  • Simplification— Comparison Chart
  • Entities
  • No Home Office
  • Corporation and Partnership Alternative
  • IRS on Partners & S Corps
  • Worksheet
  • Reporting on Schedule E
  • Self-Rental
  • Exclusive Use Test
  • Separate Structure
  • Separate Structure— Home Sale
  • Determining Office Area
  • Depreciation of Home
  • Profit Motive: Three Critical Reminders for Your Clients
  • Prove It
  • Expenses
  • Rent
  • Business Rent
  • Review- Unreasonable Rent
  • Mortgage Interest
  • Does Moving the Interest to Schedule C Increase the Allowable Loan Limit on Schedule A?
  • Depreciation
  • Rental Depreciation 2018
  • Daycare
  • Form 8829

Learning Objectives

  • Recognize how to use the home office deduction to the taxpayer's best advantage
  • Describe how to avoid needless audit
  • Identify disadvantages of having a home office
  • Identify red flags for a home office
  • Recognize the questions a taxpayer should assess to determine if a home office deduction is allowed
  • Identify characteristics of the simplified home office deduction method
  • Differentiate deductible expenses for home offices without visitors
  • Recognize proper statements with respect to the accounting for daycares
  • Identify key characteristics of avoiding home office disadvantages
  • Describe forms included in a taxpayer's return which would be red flagged if they also have rent or utilities included on Schedule C
  • Identify proper documentation
  • Recognize what can cause an Office in Home deduction to attract an IRS audit
  • Describe simplified deduction
  • Recognize what is required when renting out your own entity
  • Identify what is often overlooked when claiming office in home
  • Describe which expense you can use when clients/customers are coming to your home office
  • Identify how home office applies to daycare businesses

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Tax practitioners at all levels regardless of tax practice who want to ensure their small business clients don’t lose this, often valuable deduction. Business owners who are just getting started – or those who have been in business for years – and want to learn what they’ve been doing correctly (or not) about their office in home deduction. Familiarize yourself with IRS Publication 587

Advance Preparation
None

Registration Options
Quantity
Fees
Regular Fee $55

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