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HOME OFFICE


Tracy Lee

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But, if you don't have a home office, you can potentially lose a big chunk of your mileage.   If mileage is part of the Sch. C expenses, and they are claiming distance from home to the first work location and back from the last work location, then the loss of the home office causes the loss of the mileage.  

I was told one time that the only reason the IRS challenges home office is when they think they can get mileage deductions removed from the return.   They don't care about a small percentage of your utilities coming through the return, they want to go after something that will have an impact on the bottom line tax.

Tom
Modesto, CA

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11 hours ago, GLJEANNE said:

But worth looking at the difference in the yearly deductions too.  The simplified gives you a tiny deduction, and over the years, that's a lot they could be saving. 

Also the tax savings  today will most likely out weigh the future gain considering SE and ordinary tax vs capital gain subject to 1250.

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Since we are on this topic, even though a client cannot utilize office in the home, I still put in the return the simplified method form if they have mileage expense claimed on the Sch C.   It is just my way of protecting my client on audit.   I am not sure if it would stand up, since I don't think ATX sends the form to the IRS.

Opinions if this is a good practice?

Tom
Modesto, CA

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9 minutes ago, BulldogTom said:

Since we are on this topic, even though a client cannot utilize office in the home, I still put in the return the simplified method form if they have mileage expense claimed on the Sch C.   It is just my way of protecting my client on audit.   I am not sure if it would stand up, since I don't think ATX sends the form to the IRS.

Opinions if this is a good practice?

Tom
Modesto, CA

Are you saying that you claim the Simplified Method Deduction even though the client can't use it?

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13 minutes ago, BulldogTom said:

Since we are on this topic, even though a client cannot utilize office in the home, I still put in the return the simplified method form if they have mileage expense claimed on the Sch C.   It is just my way of protecting my client on audit.   I am not sure if it would stand up, since I don't think ATX sends the form to the IRS.

Opinions if this is a good practice?

Tom
Modesto, CA

Deducting an expense not allowable by the tax code?

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1 hour ago, DANRVAN said:

Deducting an expense not allowable by the tax code?

 

1 hour ago, cbslee said:

Are you saying that you claim the Simplified Method Deduction even though the client can't use it?

Not exactly.  When a client has a loss on the schedule C, and part of that loss is derived from mileage expense, I include the home office worksheet in the return and check on the simplified method.   Obviously, the simplified method will not increase the loss on the return as it is not allowed by the code to do so.  My reasoning is that if the return is audited, I can show that there was a home office on the return, it just did not produce a deduction for the business.   The workpapers to the return shows the square footage of the home and the square footage of the office, hence, there must be a home office.

Sorry if that did not make sense.   Maybe it still doesn't.

Tom
Modesto, CA

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