Taxes_Claiming half rent
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- ********
How do you have to show proof?
- acescence0
half is risky. do you actually use half the space only for work? you don't have to prove it until (if) you get audited.
- I thought half was the standard. And yes, half the space is office.********
- sorry, posted at the same time.DoubleKing
- so you never do anything personal in this office? half your kitchen and bath as well?acescence
- my accountant has me at 23% of my place...one room and storage. if you use 50% it might raise some flags.TREBIO
- I thought half was the standard. And yes, half the space is office.
- DoubleKing0
proof is in the audit. everything else is just numbers. half sounds like a very high number for a home office
- ********0
Do you use half of your house/apartment for your business?
- ********0
I think the tax man will probably doubt that you use half of your place for work. You can only claim the actual space you work in.
- DoubleKing0
typically it has to be a dedicated space... roped off, etc. I think i claim 20% for the bedroom i use as an office. That includes 20% utilities.
- mistermik0
in uk you can claim £10 per week from home for elec, gas etc without them checking - anything over and you risk it.
Also to claim rent is a no no - as you don't pay commercial council tax,
- ********0
I live in a zoned commercial building. I can claim.
- cramdesign0
the space must be used for business 85% of the time. so if you use a laptop on the kitchen counter, you can't count the kitchen. (at least this is my understanding)
- acescence0
if you're looking for ways to lower your tax burden there are safer ways. this is a big red flag.
- my accountant always tells me that home offices are red flags so be conservative.cramdesign
- DoubleKing0
keep in mind that if you actually honestly use 50% of the space for business that it's going to set off a lot of flags. take a look at what you're saving on your deduction vs the cost in time and expense of an audit. it may be cheaper for you in time and legal fees than to claim less than you actually use.
- visualplane_0
I'm using 40% of my apartment as a office space, and my accountant didn't say anything. This thread is raising a red flag on my accountant.
- ********0
I work for myself. I am my own boss. I work from home. I don't see why that would set off "red flags" if I have the w4's to go with it.
- utopian0
Be sure that you have allocated work space in your apartment, along with a copy of a rent check that you send to yourself each month, along with all of your bills E.g. cell phone, internet, utilities, etc...
- JKilla770
Do you use your living room to meet with clients?
- ********0
People are pointing out things that should be of concern to you but you don't seem care.
So go claim your 50%, fuck it... claim 75%. I'm sure you've sent emails while pinching a loaf so I'm sure you can write off the shitter too!
- horton0
no more than 1/4 of your living space or your begging for an audit.
- GreedoLives0
I used to claim it for 5 years or so, and my ex-roomate's done it for over 10 years now, and neither of us has been audited. But we kept it honest, we figured out the square footage of our place and then what percentage of that we actually used for 'business purposes.' They say it's a red flag, but the IRS audits something like 0.001 percent of taxpayers, so, if you can back it all up, why not go for it.
- you "used to claim it" meaning 50%..? we're only saying 50% is a red flag.horton
- no, mine was something like 22% of total living space, 50% is much unless you can prove it...GreedoLives
- visualplane_0
I took photos so I have the proof. I think we're held liable for three years.
- horton0
and keep in mind that % applies to more than just your rent; heat, electric, etc... so if the taxman comes back and bites you in 5 years, its gonna hurt.
- I thought you're held liable for 3 years, no?visualplane_
- US i dunno; was 7 years in canada.. they just reduced to 5horton
- yeah, i thought it was 7 that you were on the hook for. 3 years is the typical audit for what they WILL look at.
DoubleKing
- visualplane_0
My biggest fear is if my accountant made a mistake and I get audited and all the fines would add up.