My home office is in the spare bedroom. That room contains a desk, computer, printer, etc., as well as some personal items. I keep my clothes in my closet and my cookbooks on my bookshelf. Is this a problem with the telecommuting deduction? If so, could you solve that problem by only charging for the square footage of the room occupied by the desk and printer?
Bronnenkant: Currently, home office deductions are not allowed for expenses related to W-2 employees. [It’s] Allowed only for self-employed individuals. One of the key requirements for the deduction is that a portion of the home must be used solely for business purposes. Given that this appears to be a mixed use, it may be difficult to qualify for the deduction.look IRS Publication 587“Use your home for business”.
Single tally: The Tax Cuts and Jobs Act of 2017 eliminated employee business expenses on Schedule A. This means you can’t take the home office deduction unless you’re self-employed, an independent contractor, or working a gig job.
“Employees who receive paychecks or W-2s solely from their employer are not eligible for the deduction, even if they are currently working from home,” the IRS says.
Even if you work as an employee and also earn self-employment income, you may be able to deduct your home office expenses.
If you qualify for a deduction, don’t hesitate to take it. For the 2021 tax year, the most recent year for which complete numbers are available, home office business deductions totaled just over $12.8 billion, according to IRS data.
To avoid entanglements with the IRS, make sure that a dedicated space in your home is used exclusively for your business.
upon IRS.gov, the standard mileage rate for 2023 is 22 cents per mile for eligible active duty military personnel driven for medical or transportation purposes. Does mileage deduction for medical purposes only apply to such service members?
Bronnenkant: Unreimbursed medical expenses (including medical travel mileage without military requirements) are deductible as an itemized deduction in excess of 7.5 percent of adjusted gross income (AGI). However, there are also some challenges. To claim the deduction, your medical expenses must exceed the relatively high 7.5 percent floor and your total itemized deductions must exceed the standard deduction of $27,700 for joint filers ($13,850 for single filers).
When Qualified Business Income (QBI) was created a few years ago, my wife and I (we file jointly, we’re both federal employees, and neither of us are real estate agents) claimed a deduction for one rental property. It wasn’t clear that it could be done. Real estate property. Can you make a claim?
Bronnenkant: Rental properties may qualify for the QBI deduction. Provided by the IRS guidance For taxpayers, learn how to analyze your situation to determine whether your rental property is a qualifying trade or business for QBI purposes. It may be helpful to have a tax professional assist you in this area.
Single tally: To give you a little more background, this type of deduction allows eligible taxpayers to deduct up to 20 percent of their qualified business income from their taxes. For more information, please visit: irs.gov and search “Qualified Business Income Deduction.”
Last year I bought a Bolt EUV. $7,500 tax credit. My tax agent tells me that my best option is to use the standard deduction on my IRS tax form, so my refund will be $0 for him. Is this correct?
Bronnenkant: The EV (electric vehicle) tax credit is available to those who take the basic deduction or itemized deductions. The biggest challenges to qualifying for many people are that the tax credit is non-refundable (you can only reduce your taxes to zero), that you meet the income limits, and that you own a qualifying vehicle. It’s about being there.
Single tally: As EV prices fall, interest in this credit is likely to increase.
The Inflation Control Act of 2022 changed the rules for this credit. To qualify, the IRS says you must buy it for yourself and use it primarily in the United States.
For more information, please visit: irs.gov and search “Credit for new clean vehicles purchased after 2023.”
Additionally, the modified AGI cannot exceed:
- $300,000 for married couples filing jointly.
- $225,000 for heads of households;
- $150,000 for all other filers.
What I inherited was vacation rental House. Even if your expenses are significantly higher than your income each year, your tax software will limit your deductions to match your expenses. why is that?
Bronnenkant: The IRS limits the rental deduction to rental income from activities that are considered nonprofit.This is a quote from here IRS Publication 527, “Rental housing (including rental of vacation homes)”: “If you are not renting out the property to generate income, you cannot deduct rental expenses in excess of the amount of rental income.” Exceeding rental costs cannot be deducted from losses or carried forward to the next year. ”
Do I have to pay taxes if I remove funds from a certificate of deposit before its maturity date?
Bronnenkant: There are no tax penalties for early withdrawals from CDs. However, any penalty charged by the bank is considered a deduction (no need to itemize).
My mother has been in a hospital or long-term care facility since November. I have access to her account so she pays her bills. However, I don’t have enough knowledge to complete her taxes. What options do she have if she cannot answer the questions accurately by the deadline?
Bronnenkant: Caring for a loved one is difficult. Intervening and helping with their taxes may be a role that is perhaps not expected. Obtaining a copy of your previous year’s tax return will help you identify your source of income. IRA, pension, social security, Investment income is common for retirees. If a tax return is not available, he may be wise to request a copy from the IRS by: Form 4506-T“Request for a certified copy of final tax return.”
Single tally: You can have your mother apply for an extension electronically while you search for the necessary documents. This gives the mother an additional six months to file her return.go to irs.gov/extensions For more information.
One note: The IRS gives you time to file your return, but you need to estimate and pay the amount you owe by the deadline.
