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It's tax-time and many are finding ways to reduce their income tax calculation.
Despite the recession, many people began businesses out of their homes. There also remain many people who continue to work out of their homes.
How does this translate over to your income-tax calculation? Well, many people have heard about the home office tax deduction. As mentioned in this blog last year, it can be a great deduction.
But there's a huge caveat. Many tax professionals are doubtful about the home office tax deduction, claiming that it can essentially be a red-flag for audit. I've heard these claims myself this past year from prominent IRS attorneys and well respected tax law professors. Yet, there are many who claim that the fear associated with the home office tax deduction is just myth. It's consistently heralded by financial writers as a great tax deduction.
But is it? Should you even take the home office tax deduction?
Maybe. But it's not as easy as deducting your dining-table work-station as a "home office," even if it is where you do most of your work.
Here are some things you need to consider about the home office tax deduction:
These are only a few points to ponder on the home office deduction. There are many resources and readings available on this topic. Be sure to research before you take the deduction.