Each year the U.S. Census Bureau publishes what it refers to as nonemployer statistics that may provide information about the increased importance of the business use of taxpayers’ homes. A “nonemployer,” for purposes of the statistics, is defined as a business that has no paid employees, has annual business receipts of at least $1,000 and is subject to federal income taxes. These nonemployers may be organized as corporations, partnerships or sole proprietorships. Because they have no paid employees, nonemployers are more likely than others to operate their businesses from their homes and seek a home office tax deduction.
The data supplied on nonemployers show a generally increasing number of these businesses, from a total of 19.5 million in 2004 to 26.5 million in 2018. Although they have no paid employees, they account for significant receipts. In 2004 they produced receipts of $887 billion; by 2018, those receipts had grown to $1.3 trillion. Clearly, the likelihood that any tax return preparer will be required to prepare a taxpayer’s tax return with a home office deduction is significant and is becoming more likely each year.
This course will examine the federal income tax deduction for business use of a home and will discuss:
- Qualifying for a home office tax deduction;
- Determining a taxpayer’s home office deduction using the actual expense and simplified methods;
- The special home-office deduction rules that apply to daycare facilities;
- The taxpayer’s home-office deduction recordkeeping requirements; and
- Where to take the deduction and the forms a tax preparer must use in connection with it.
Course Publication Date:
February 21, 2024
This course is available with
NO ADDITIONAL FEE if you have an active
self study membership or
all access membership or can be purchased for
$30.00!
| Author: | Paul Winn |
| Course No: | TAX-HOMEOFF-3074 |
| Recommended CPE: | 3.00 |
| Delivery Method: | QAS Self Study |
| Level of Knowledge: | Overview |
| Prerequisites: | None |
| Advanced Preparation: | None |
| Recommended Field of Study: | Taxes
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Learning Objectives
- Recognize the general requirement for exclusive use applicable to home-office deduction and the exceptions to the requirement.
- List the requirements that apply to a taxpayer’s qualifying for a home-office deduction for purposes of storage of product samples or inventory.
- Identify the conditions a taxpayer must meet in order to qualify for the exception to the exclusive use rule when operating a daycare facility.
- Recognize the factors that must be considered to determine if a taxpayer’s home is the principal place of business for purposes of the home-office deduction.
- List the exceptions to the requirement that a home office must be the taxpayer’s principal place of business in order to qualify for a home-office deduction.
- Distinguish between the actual expense method and simplified method of figuring the home-office deduction.
- List the expenses normally deductible by taxpayers using a home for business purposes who use the actual expense method.
- Recognize the limits applicable to a home-office deduction.
- Calculate the home-office deduction for daycare facilities.
- Identify where expenses of a home office are deducted.
- Recognize the recordkeeping requirements applicable to taxpayers taking a home-office deduction.