Deductions and Write-Offs
The most frequently asked tax questions related to Deductions and Write-Offs
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Answer Tax QuestionsBonus depreciation - vehicles
Asked Monday, November 28, 2011 by an anonymous user
Bonus first year depreciation for vehicles placed in service in the current year that were new and used over 50% for business is $11,160 for auto's and $11,360 for light trucks and vans.
Can I claim home office expenses for a day care facility?
Asked Monday, November 28, 2011 by an anonymous user
A person who does not meet the exclusive use requirement because the use is for a day care facility will still qualify to deduct expenses as a home office. The day care must be for children, handicapped persons or persons 65 or older. You must have a license, certificate registration or other approval as a day care center under state law.
Are my home office deductions lost in the year they were limited?
Asked Monday, November 28, 2011 by an anonymous user
Home office deductions cannot exceed your gross income from your home office activity. If in a year that home office deductions were limited due to the gross limitation then the unused deductions are not lost buy carried forward to future years to be used in a year when gross income exceeds the home office deductions.
Can I deduct a loss on business that claimed home office deductions?
Asked Monday, November 28, 2011 by an anonymous user
Home office deductions cannot exceed gross income from the home office activity.
Can I deduct my phone charges as a home office deduction?
Asked Monday, November 28, 2011 by an anonymous user
The basic monthly phone charge for your first telephone line to your home cannot be deducted. Long distance calls or call forwarding, call answering, call waiting used for business can be deducted.
You may deduct the entire phone bill for a second phone line used exclusively for business.
Also additional phone lines dedicated for fax lines are 100% deductible.
You may deduct the entire phone bill for a second phone line used exclusively for business.
Also additional phone lines dedicated for fax lines are 100% deductible.
How do I prove that the home office is used as a principal place of business?
Asked Monday, November 28, 2011 by an anonymous user
Examples of substantial management and administrative activities that would substantiate a home office deduction include billing clients, customers or patients, maintaining books and records, writing reports, scheduling appointments, ordering supplies, reading professional or trade journals.
What documentation is needed to deduct a home office?
Asked Monday, November 28, 2011 by an anonymous user
In addition to actual receipts of expenses paid, It is a good idea to photograph your home office and keep it with the tax return it is being claimed on. This would add to the proof requirement of business use exclusivity.
How do I allocate indirect expenses in my home office?
Asked Monday, November 28, 2011 by an anonymous user
Generally the number of rooms identified as the home office divided by total rooms equals your percentage of business use.
What expenses are deductible in my home office?
Asked Monday, November 28, 2011 by an anonymous user
Expenses directly allocated to the home office such as painting the office or buying furniture for the office are 100% deductible. Other expenses indirectly incurred are deductible at a business expense allocation percentage. These would include Real estate taxes, mortgage interest, depreciation, utilities, rent, insurance, snow removal and security.
