PHILADELPHIA, PA, August 28, 2013 /24-7PressRelease/
-- Michael Lallana
understands how frustrating taxes can be. Luckily, there are some tips and tricks to help people lower their yearly charges. Financial advisors often talk about tax-deductible expenses. These typically include work-related expenditures. Thousands of dollars are saved a year by people claiming the right deductions on their tax forms. However, there are some specific guidelines to look out for when scouting for available deductions.
Fox Small Business recently published an article
that lists tips on how to deduct a home office. Recent years have seen a boom in work-at-home employees, increasing the amount of home offices. Experts like Michael Lallana have compiled different factors that can affect tax deductions. The IRS has begun cracking down hard on taxpayers so it is wise to consider all possibilities in order to avoid an audit.
"With a growing market for online and home-based businesses, it's good to know what you can and cannot deduct for tax purposes," says Michael Lallana. "It's always best to consult your CPA or tax representative to make sure that you can actually deduct your dining room area workspace, or else you might hear a knock on your door from an auditor."
One particular taxpayer considered deducting his dining room table on his reports. The reason for this was because he often worked on the table whenever it was not used for dining purposes. Unfortunately, the IRS is very stringent when it comes to these types of situations. Tax reporting strictly prohibits multi-purpose home office furniture. This client was not allowed to deduct the dining room table since it served an alternative purpose.
Similar rules are upheld for other pieces of furniture. Couches and beds cannot be deducted as "workspaces." They serve multiple purposes and thus do not qualify. According to experts, the laundry room is a prime place for deductions.
Home workers should set up a small office in their laundry room. This should include a computer, desk, files, and printer, along with other basic supplies. After it is set up, the measurements are sent to the auditor who will then calculate the deductions. It is most likely that an auditor will also visit the site to ensure accuracy. They will measure the dimensions of the workspace to verify that the right amount is being deducted.
The IRS has made it easier for people who are setting up an office at home. Rather than calculating every single expense, workers can deduct five dollars per square foot of space up to 200 square feet. The cap is at $1,500 and usually makes up a minimal deductive figure. An effective way to prove that the office was accurately measured is to take photos or a video. This can be sent in as verification that all measurements are truthful and will hopefully keep the IRS off the property.
Michael Lallana recommends people to look at every available option when trying to find home office deductions.
Michael Lallana has worked many jobs throughout his career. Right out of college, he was employed as a management consultant at Price Waterhouse Coopers Consulting from 2000 to 2003. Afterwards, he worked at Northwestern Mutual Financial Network. He then went on to work as a business developer for CrowdCrave.com One of Michael's first entrepreneurial endeavors was founding the Mila Venture Group. As President and CEO, he is in charge of this strategic marketing firm's practice of accelerating businesses. During his free time, Michael plays golf and spends time with his daughter.