Monday, February 19, 2007

What The Homes Of The Future Will Look Like

The National Association of Home Builders predicts homes of the future will look like this:
* Ceilings will be high and flat or have decorative panels or domes.
* Living rooms will be gone, replaced by a den, parlor, or library.
* Dual closets will be standard in the master bedroom.
* Entry doors will be at least 6 inches wider han the 3-foot doors of today.
* Bigger garages with front-to-back parking.
* Open floor plans defined by ceiling panels, floor coverings, or pillars.
* Shower stalls will be bigger and may have multiple shower heads.
* Outdoor kitchens and fireplaces will be common.

Information courtesy of the "House Notes" newsletter provided by The Inspection Company.

Friday, February 09, 2007

Is Your Home Office Tax Deductible?

Is Your Home Office Tax Deductible?

You can deduct certain expenses if your home office is the principal place where your trade or business is conducted or where you meet and deal with clients or patients in the course of your business. Your home office will qualify as your principal place of business if you use it exclusively and regularly for the administrative or management activ- ities associated with your trade or business. There must be no other fixed place where you conduct substantial administrative or management activities.

Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses.

Here are some basic facts to consider if you work at home:

A home office may qualify for deductions if you use it for administrative or management activities of your trade or business if there is no other fixed location to conduct such activities.
The home office deduction is available to you whether you rent or own.

If you rent, figuring your home office deduction is relatively simple. Just multiply your annual rent payment by the percentage of the total space occupied by the office. That prorated portion can also be applied to utilities, insurance, repairs and maintenance.

There are limitations to home office deductions based on your income. The taxpayer must be able to itemize deductions, using Schedule A. The home office deductions - along with other miscellaneous deductions - must exceed 2% of your adjusted gross income.

If home office deductions exceed net self-employment income, those deductions may be carried forward to the next year, again, only if the self-employed has sufficient net income.
For telecommuters, the business use of an employee's home must be for the convenience of the employer, and the employee must not be renting the office space to the employer.

5 Tips on Understanding Home-Office Deductions

Take advantage of every legal opportunity to reduce your taxes. Recent changes in the law benefit business owners who use their homes as an administrative and management base but work at other locations.

Ask your tax professional to analyze your business regularly so you don't miss important deductions.

Document deductible items. These usually include such costs as computers and other equipment, telephone charges, furnishings, and prorated portions of rent, utilities and home insurance. You may not deduct expenses for lawn care or those related to rooms not used for business.

If you are a homeowner, discuss with your tax advisor whether or not to take a depreciation deduction for the office space.

For detailed information, go to the Internal Revenue Service website, and download IRS Publication 587, Business Use of Your Home.

If You've Got It, Deduct It...Maybe.

Running a home-based business can offer many beneficial tax deductions that other businesses sometimes may not claim. Unfortunately, too many small business owners end up paying extra taxes every year because they are unaware of several small business deductions that are available.

Each business may be different, however, so be sure to discuss any possible deductions with your tax advisor or accountant.

If you join any business or purchase into any franchise, the expenses, such as kits or franchise fees, may be claimed as deductions.

Be sure to save all receipts for any supplies you purchase for your business use. Computer paper, business cards, pens, catalogs, or any other items you purchase and use for your business.

Most advertising and giveaways can be claimed on your taxes. Keep all receipts for any newspaper ads or any advertising you do online.

If you have a phone line or internet connection for business use, save all receipts for each bill paid.

If you incur fees from customers' bounced checks, those amounts may be deductible. Be sure to keep the returned check, the letter from your bank and your bank statement to show the fees you were charged.

Keep receipts for all shipping supplies and postage.

Computers, copiers and fax machines may also be deductible.

The Trivia Block

When did the income tax become a permanent fixture in the United States?

In 1913, with the 16th Amendment. (Tax rates started at 1%!).