I bought a home in January for 600K -- cash. I use 10% as a dedicated home office. Feel I qualify for TTS. How much do I expense?
%% USED to be like 2,400 square feet home ; so say, one room exclusive for home office trading= 12x12 =240 sq ft. Good starting point; but ask a CPA over the phone, there should be no CPA charge for what used to be a simple question...... BUT its based on sq ft, not price .[Home with acreage or good location would be worth more, but deduction is based on sq ft office space]
There's more than one method, but the simplified method is basically measuring the size of your office to calculate the square footage and then multiplying that by $5 to come up with the actual deduction amount. And I think the maximum allowable area is 300 sq. ft. All the detailed info is at https://www.irs.gov/publications/p587 Programs like TurboTax can calculate it all for you by answering the questions they ask.
zero. It’s the hardest deduction to support and the easiest way to get audited. but this probably isn’t the right board to ask the question. Have at it!
How can you say 10% of the home? Normally it is the square foot of a room. Then 5 $ per sq foot to a max of 1500. Tts has nothing to do with it.
Certain items can very easily trigger audit. And the statement above raises immediate question for anyone. Is someone really foregoing 20 ×15 real-estate otherwise available for any other purpose. IRS is not a bunch of stupids and there are folks trained to look at these items that is minor but for them a potential tax fraud. It may very well be true but in which case you are the one that has to come up with defense and not them. Just like how we think we are smart in saving tax do think there are folks on the other side whose only job is to catch something. Audit for one reason will trigger something else and then it is nothing but harassment.
You're putting the cart before the horse. You'll first need to qualify for TTS, then file for a home office deduction. Otherwise the IRS will judge you as any other investor, and will flag your deduction. A few hundred dollars per year isn't worth the hassle.
Is it that unusual to run a business out of an unused bedroom or even a garage that is not being utilized?