Sugar Magnolia Posted January 21, 2008 Share Posted January 21, 2008 I have a home office which totals 10% of the square footage of our home. Last year we had roof repair done to repair two leaks. One leak was coming into our laundry room, and the other was coming into my office. The total cost of repair was $1600. As a deduction can I write of $800 (1/2 the cost of the repair dedicated to fixing my office), or can I only write off $80 (10% of 1/2 the cost of the repair), or do I write off $160 (10% of the total cost of the repair). Quote Link to comment Share on other sites More sharing options...
MrTed46 Posted January 22, 2008 Share Posted January 22, 2008 I have a home office which totals 10% of the square footage of our home. Last year we had roof repair done to repair two leaks. One leak was coming into our laundry room, and the other was coming into my office. The total cost of repair was $1600. As a deduction can I write of $800 (1/2 the cost of the repair dedicated to fixing my office), or can I only write off $80 (10% of 1/2 the cost of the repair), or do I write off $160 (10% of the total cost of the repair). I am a corporate accountant so I dont do taxes. From what I remember I think $160 would be what you can do. But I hope someone who def knows will answer as now I am curious also. Quote Link to comment Share on other sites More sharing options...
wildcat2334 Posted January 22, 2008 Share Posted January 22, 2008 I am a corporate accountant so I dont do taxes. From what I remember I think $160 would be what you can do. But I hope someone who def knows will answer as now I am curious also. +1 I think the rule is you abide by the 10% of any home expenses that are not directly related to the biz- indirect costs are 10% across the board $160 it is Quote Link to comment Share on other sites More sharing options...
budlitebrad Posted January 22, 2008 Share Posted January 22, 2008 Yep, you use your business percentage for home repairs. Quote Link to comment Share on other sites More sharing options...
Controller Posted January 22, 2008 Share Posted January 22, 2008 Also keep in mind that the business home deduction is often an "audit flag" so if you any reason to fear an audit, you might want to reconsider even taking the $160 deduction Quote Link to comment Share on other sites More sharing options...
Sugar Magnolia Posted January 22, 2008 Author Share Posted January 22, 2008 Also keep in mind that the business home deduction is often an "audit flag" so if you any reason to fear an audit, you might want to reconsider even taking the $160 deduction This is a very legitimate working office and meets all the criteria. I am self employed with a business license, make money on the business, and the space is ONLY used as my office-we even have another office in our home used to pay bills and for personal use ,with it's own personal computer, copier, printer and filing cabinet for personal papers. I am very on the up and up and honest when claiming deductions-I've been audited before and didn't owe a penny and the auditor was very impressed by my record keeping. I'm not afraid of the IRS. The pain in the butt was the cost having to pay my CPA, $125 an hour to represent me in the audit. Pi**ed me off. Quote Link to comment Share on other sites More sharing options...
Sugar Magnolia Posted January 22, 2008 Author Share Posted January 22, 2008 +1 I think the rule is you abide by the 10% of any home expenses that are not directly related to the biz- indirect costs are 10% across the board $160 it is Another important rule is the repair has to "benefit the space", so a repair to the fridge is not deductible. Quote Link to comment Share on other sites More sharing options...
Dragon Posted January 22, 2008 Share Posted January 22, 2008 This is a very legitimate working office and meets all the criteria. I am self employed with a business license, make money on the business, and the space is ONLY used as my office-we even have another office in our home used to pay bills and for personal use ,with it's own personal computer, copier, printer and filing cabinet for personal papers. I am very on the up and up and honest when claiming deductions-I've been audited before and didn't owe a penny and the auditor was very impressed by my record keeping. I'm not afraid of the IRS. The pain in the butt was the cost having to pay my CPA, $125 an hour to represent me in the audit. Pi**ed me off. Not doubting your honesty, but I think Controller's point was: is the $160 Deduction worth the cost of the CPA's fees because it is a big red flag. And by the way, at a $125 / hour - you got a deal. Quote Link to comment Share on other sites More sharing options...
Sugar Magnolia Posted January 22, 2008 Author Share Posted January 22, 2008 Not doubting your honesty, but I think Controller's point was: is the $160 Deduction worth the cost of the CPA's fees because it is a big red flag. And by the way, at a $125 / hour - you got a deal. Good point-but this time around it is a simple semi-reitrement job, with just me, myself and I, and if I got audited, I wouldn't hire a CPA. The last business where I got audited, was a business that had employees, independent contractors, retirement/pension plans, and lots of inflow/outflow of money, so I hired one to represent me. The last business was a clearly red flag since it was a business worth auditing based on the gross income. I only net about $20,000 with my current business. Unless it's a random audit, I would expect the IRS to look for bigger fish. Again, I do see your point, and will consider it when I make the deduction. The $125 per hour was about 10 years ago. Quote Link to comment Share on other sites More sharing options...
keggerz Posted January 23, 2008 Share Posted January 23, 2008 (edited) Also keep in mind that the business home deduction is often an "audit flag" so if you any reason to fear an audit, you might want to reconsider even taking the $160 deduction when i asked about having my "office" at home for deductions my cpa said the same thing...but for me i have a store and the office wouldnt be 100% office since i use it to surf on the huddle with (meaning i was using the office for leisure too) Edited January 23, 2008 by keggerz Quote Link to comment Share on other sites More sharing options...
muck Posted January 23, 2008 Share Posted January 23, 2008 One solution to the way you are doing it is to "rent space" to yourself ... that way you are not messing around with these sorts of calculations, plus (and I am not completely sure on this part), you may not have to have it exclusively used for work. Quote Link to comment Share on other sites More sharing options...
twiley Posted January 23, 2008 Share Posted January 23, 2008 (edited) Not doubting your honesty, but I think Controller's point was: is the $160 Deduction worth the cost of the CPA's fees because it is a big red flag. And by the way, at a $125 / hour - you got a deal. Yup, when I was first starting out I worked out of my place and was getting ready to claim some deductions like this, my CPA gave me the long drawn out speech about the red flag. I took into consideration that he's $200 an hour I decided it wasn't worth it to write it off. The IRS doesn't care if you're a small fish or a large fish when it comes to audits. 3 years later I was audited for some other things and I'm glad I didn't try and nickel and dime them. Edited January 23, 2008 by twiley Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted January 23, 2008 Share Posted January 23, 2008 Not doubting your honesty, but I think Controller's point was: is the $160 Deduction worth the cost of the CPA's fees because it is a big red flag. And by the way, at a $125 / hour - you got a deal. well, i think sorta gather that she's probably already taking the home office deduction for mortgage interest, property tax, utilities, whatever else she can deduct. i doubt that throwing in this repair will add any additional red flags. Quote Link to comment Share on other sites More sharing options...
Sugar Magnolia Posted January 23, 2008 Author Share Posted January 23, 2008 (edited) One solution to the way you are doing it is to "rent space" to yourself ... that way you are not messing around with these sorts of calculations, plus (and I am not completely sure on this part), you may not have to have it exclusively used for work. Then I have to give myself a 1099-misc for the rental income and claim the rent back as income, so isn't it a wash? I'm not incorporated. Edited January 23, 2008 by Sugar Magnolia Quote Link to comment Share on other sites More sharing options...
Sugar Magnolia Posted January 23, 2008 Author Share Posted January 23, 2008 well, i think sorta gather that she's probably already taking the home office deduction for mortgage interest, property tax, utilities, whatever else she can deduct. i doubt that throwing in this repair will add any additional red flags. Anotehr good point. I do write off 10% of utilities and home owners insurance, but property taxes can be deducted on schedule A, and if I had mortgage interest, it would go on schedule A as well. Quote Link to comment Share on other sites More sharing options...
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