2019 Tax Returns

At the risk of being called out for bringing up this topic - I thought I'd pose a question. I'm not doing nearly as many shops as I had been doing prior to COVID so I thought I'd try to prep for tax time after T-Day. That way (as I expect a refund) I can be ready to file early on nd get that lovely refund in the bank sooner.
For those of us who are not doing nearly as many shops, can I still take the same home office expenses I have in the past? Or do I take less since I'm not doing as much work?

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I would guess that if you use the space less, you use less light, heat, cooling, water, or whatever costs are associated with it. ? But I want to know this, too. I do not have this deduction, but I always thought the home office deduction was relevant if you had a demonstrably appropriate separate space and could calculate its size and percentage or portion of utility and other costs.

Bach is not noise, Madam. (Robert, in Two's Company)

The deduction is based solely on the percentage of space used in your home, not on your level of taxable income. But, check out the IRS publication to see if/how the "sole use" criteria may apply. I thought that it was removed or modified several years ago. (ETA, But please see Flash's update on this, below. )

btw: on sale of your residence all depreciation claimed for business purposes will be "reclaimed " as taxes due IF you were claiming depreciation.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.

Edited 1 time(s). Last edit at 11/06/2020 05:22PM by walesmaven.

There are two types of home office deduction. The traditional one allows itemized cost sharing of all expenses for the space and takes depreciation of the space itself. This depreciation must be recaptured on sale of the home. The simplified version arrived in 2013 and allows $5 per sq ft of designated office space up to a $1500 max per year. There is no depreciation being taken and thus no recapture on sale required.

[www.irs.gov]

The home office deduction requires 'exclusive and regular use' of the space for your business, whether you are going traditional or simplified. This does not define how many hours or days etc. but the space can't be a part time guest room or hobby room unless you have carved out your space for 'exclusive and regular use'. (In the case of traditional office you may still need a door to separate the space from other spaces.)

[www.irs.gov]

FYI According to sellers on Amazon, TurboTax 2020 is scheduled to be released Nov 13th. Getting it early allows you to do some year end tax planning.

Edited 1 time(s). Last edit at 11/06/2020 04:41PM by Flash.

If you are still running Win 7, note that Turbo tax 2020 will not support that. They sent out a couple of emails to notify people.

I have also edited my post above based on Flash's information.

Flash, thank you for clarifying the current state of the home office deduction. I do not use it (or, rather, have not since about 1983 when I bought my current home.) , so have not kept up with various developments, I fear.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.

Somebody on here pointed out the new, special version, to me a couple of years ago because I had always advised against the deduction due to the recapture on sale provision. It does become a $1500 max deduction for independent contractors. I would expect that Congress should see fit to extend it once again to employees who are required to work remotely, but for now they get nothing.

Edited 1 time(s). Last edit at 11/06/2020 05:51PM by Flash.

Well, since employee UI has been extended to ICs due to the emergency, it would seem only fair that employees forced to work from home get similar tax benefits.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.

I may have done it incorrectly but I used the office tax deduction when I owned my home but I never took the expense for home depreciation. I just left that one out. At any rate, IRS accepted my tax returns for those years. At that time I had a third bedroom I used for an office. Now that I am in an apartment I take the sf of the dining area that I use for workspace, including half of a closet used for storing office supplies. I am sorry to hear TT is not supporting Win 7 but I did finally allow myself to pull the trigger and update to Win 10. So all is good here with using TT again this year.

I have also ordered a Win 10 computer, but for other reasons than Turbo Tax. I have someone standing by to make the interface on the new screen look and act like my current Win 7 one, without sacrificing functions of Win 10.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.

It won't change if you do NOT allow Microsoft Edge to be used as your primary. I hated to give up WIN 7 and you really won't notice much change. I used the old Picture Manager program from 2003 Office and discovered it was still usable on Win 10.
I used to be a Dell and HP gal but back when I was still working I found that once we got past the warranty period it seemed to me I was always having computer problems. Switched over to a Lenova laptop about 5 yrs. ago and it's a real workhorse. No problems so far.
I replaced my little HP Laser Jet to a 4-in-1 HP printer because I wanted the capability of scanning. Used that for several years but really didn't fall in love with it as it was very heavy (for a little old gray-haired lady to move) and went to office supply store. Looked at the HPs and they were all pretty pricey. Talked to my saleslady and asked what she would recommend. She pointed me to a Brother J8700W. I told her that in the past I hadn't been impressed with Brother. She said they had come a long way so the price was pretty decent and I bought it. don't use the fax or the multi-feed features. I really like it as my little ol' Laser Jet and it's nice that the ink cartridges are small.

I will be getting a laser monochrome all-in-one printer (etc.). The Brother one will scan to PDF as well as jpg and is a great price.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.

Wales - I hope you are as pleased with yours as I am with mine. Mine is an ink jet and is light enough that I can move it myself. Now that I am older (note that I didn't say old) one of my tests for anything is if I can move it myself. I like being low maintenance for my family!

@walesmaven wrote:

Well, since employee UI has been extended to ICs due to the emergency, it would seem only fair that employees forced to work from home get similar tax benefits.

That which is logical and fair is not what government offers most of the time. And when they offer something that is fair and logical it somehow always seems to end up being a loophole for abuse.

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2019 Tax Returns

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