Contrary to popular belief, home office deductions do not always result in an audit. If you qualify for the deduction and execute correctly, they can save you a great deal of money with very little effort.
In this video, Entrepreneur Network partner Mark J. Kohler specifically outlines the requirements for home offices, as well as the two methods of calculating the deduction.
The qualifying criteria specifies that the home office area must be devoted to business purposes and must be the principal place of doing business. The two calculation options are the traditional method, which uses the square footage of your office and home, and the simplied method, which is $5 per foot for up to 300 square feet per year.
The traditional method involves many variables, so it can be difficult to calculate, but Kohler strongly recommends that you run the numbers using both methods.
Click play to get a better understanding of home office tax deductions and learn about a bonus home office reimbursement just for S corporations.
Watch more videos from Kohler on his YouTube channel here.
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