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You helped me before and I have another question: I work as…

Hi Barbara,You helped me before...
Hi Barbara,You helped me before and I have another question:
I work as an independent contractor for a company. I pay my own taxes, they send me a 1099 form at the end of the year. I keep a detailed book on my gas mileage, complete with a calendar, tolls and days I travel to the worksite. I also work for te client from my home, I go there to photograph products and do the photoshop work at my house. My calendar breaks down office days and home days. I know the percentage of my home use is 17%, that is based on my office space and square footage of my home. Can I deduct 17% of my internet, electricity, mortgage, home insurance and cell phone bills?
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Answered in 38 minutes by:
3/25/2018
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,393
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Thank you for requesting me.

There are two basic requirements for your home to qualify as a deduction:

  1. Regular and exclusive use.
  2. Principal place of your business.

You can deduct the actual expenses of your home office based on the percentage of your home devoted to business use. (In your case, 17%). These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation.

The following link contains additional detailed information that you will find helpful:

https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction

Several years ago, the IRS implemented the Simplified Method for Home Office Deduction.

Simplified Option

For taxable years starting on, or after, January 1, 2013 (filed beginning in 2014), you now have a simplified option for computing the home office deduction (IRS Revenue Procedure 2013-13, January 15, 2013). The standard method has some calculation, allocation, and substantiation requirements that are complex and burdensome for small business owners.

This new simplified option can significantly reduce the burden of recordkeeping by allowing a qualified taxpayer to multiply a prescribed rate by the allowable square footage of the office in lieu of determining actual expenses.

You may want to try each method to determine the which is BEST FOR YOU.

Please let me know if I can assist you further.

Thank you and best regards,

Barb

Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,393
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Thank you very much for the positive rating of my answer. I really appreciate it!

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Customer reply replied 3 months ago
you answered my questions thanks

My pleasure.

Have a great day!

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