Is Your Home Office a Tax Shelter?

This week, Craig Siminski, of CMS Retirement Income Planning, shares an article showing which taxpayers are eligible for the home office deduction, and describing the two methods used to calculate it:

The pandemic ushered in the age of video meetings, providing a glimpse into many kinds of home workspaces. For many workers, a dedicated home office became more important than ever in 2020, though not everyone will get a tax break for having one.

Only self-employed workers, independent contractors, and partners in certain pass-through businesses may claim the home office deduction on their personal tax returns.

To qualify, a home office must be the taxpayer’s principal place of business and be used regularly and exclusively for work — not to manage personal matters or pursue a hobby. It must be a separately identifiable space, but not necessarily an entire room.

Taxpayers who operate a trade or business out of a qualifying home office can choose between two different calculation methods, one of which could result in a…

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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 22 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.

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