People who have home offices can often take advantage of a variety of deductions when filing season comes around. However, it makes sense to talk to a knowledgeable tax preparer since there may also be some unforeseen expenses, notes a recent media report.
An article by Bankrate.com warned that one thing to watch out for with home office deductions is depreciation benefits, since these can result in an additional tax burden for people when they decide to later sell their house.
The financial Web site noted that even people who do not claim depreciation of a home office may find themselves on the hook under certain circumstances for taxes when the property is sold.
Still, those who maintain a home office can take advantage of a number of deductions associated with the cost of doing business, from purchasing supplies to maintaining phone lines and computer lines. However, certain rules also apply for example to computers that are used for both personal and business purposes.
According to the Internal Revenue Service, the self employment tax rate is 15.3 percent, with 12.4 percent going to Social Security and 2.9 percent for Medicare.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.