Make your home office a tax-deductible expense

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By Brandon

For millions of UK workers who work remotely, the home office deduction can be a great tax benefit. There’s one catch. You can’t work.

You can’t typically deduct office expenses if you work remotely for a company.

Here is a brief overview of the main criteria for deducting expenses from your home office. Also, some tips and tricks on how to make your home office a tax-planning opportunity.

The basics of the deduction for tax at home

Two requirements must be met in order to qualify as a tax-deductible home office

* Your home office is only used for business purposes. Your home office should only be used for business purposes. It can’t be used as a living room or media center. To meet this requirement, you should set up your office in a different area of your home. The IRS will not make any mistake if you are audited.

* Establish that your home office serves as your principal business location. According to the IRS, you can meet customers or hold meetings at other locations but your home office must be where you do all of your administrative work. You should keep a log of all activities and explain how they do not violate the principal place of the business rule when you meet customers or work on any part of your company from outside your home office.

These two requirements are likely to be fulfilled by anyone who works from home.

Eligible for the home-office tax deduction

Although it is not a good idea to move from an employee to a contractor just to get a home-office deduction, many people miss this opportunity. These are just a few suggestions.

* Be an independent contractor: This is the easiest way to deduct home office expenses. It involves a transition from employee status to independent contractor status. It may be worth looking into this option, as many companies are cutting wages and benefits due to the epidemic. It may be worthwhile to do the math and compare all the deductions you have from your home office with the cost of losing employee benefits if you meet the IRS requirements for being an independent contractor.

* Start a secondary company: If you are not allowed to be an independent contractor, consider starting a side business. You can deduct business-related expenses, including those incurred at your home, from your tax return. This route allows you to deduct home office expenses from your main workplace.

If you building a home office tax deductible UK for business purposes, you may be able to deduct the expenses related to it. This includes things like hiring a professional to set up your office, buying furniture and equipment, and even paying for internet access. It’s important to keep track of all the expenses you incur in order to claim them on your tax return. There are some exceptions, of course, but if you’re using your home office as your main business location, it’s worth investing in some tax-deductible gear.