Writing off mortgage
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- brandelec
Anybody have experience having a home office setup and writing off (part of) your mortgage?
I'm not sure if this is possible in most countries, but I know this can be done in Canada - want to hear any experiences/tips.
- CyBrainX0
You definitely can in the U.S. Here's a head start. http://www.irs.gov/newsroom/arti…
- ETM0
Sure. Is the office dedicated space to work, or shared (also a spare bedroom etc)?
- hektor9110
yes you can do it... I write my rent!
- ETM0
Its easiest if its dedicated space. At the simplest level, you take the square footage of your workspace against your total square footage and determine the percentage.
You apply that percentage against your mortgage, mortgage insurance and anything your business consumes like electricity, an alarm monitor fee if you have one, etc.
- ETM0
An aside -- Do you ever take clients into the home? If so, most home insurance policies allow you add a clause for that in the event an injury occurs on the premises (slip on sidewalk/steps coming or going etc.). Worth having and you can claim a portion of the home insurance. It's pretty cheap too, couple bucks a month.
- kona0
yes if it's a "dedicated space"
total up all your monthly expenditures that you could write off...
mortgage
internet
phone
heat
electricfor numbers sake say that all totals up to be 2000 a month.
your room is 10ft x 10ft which = 100sq feet.
with a little math (total sq ft of house / sq ft of room / $ per year = what % you can write off of that total. meaning, what % of heat, electricity, internet and mortgage can be applied to that space.
- bulletfactory0
^ right on.
- SrSamaurai0
*make sure that it is a sizable amount that you'd be saving because it can/could increase the possibility of an audit if that matters. my accountant told me that.
- Audits cost nothing and mean nothing if your claims are legit. Have your files organized and say "here you go".ETM
- fyoucher10
Look for a thread on 'Taxes' from a week ago or so. I wrote up a big ole list of deductions.
- brandelec0
cheers fyoucher1
- fadein110
everyones right about a percentage of your home expenses being deductible - but in the UK - you also have to add another factor which is time - ie how much time is spent working in that space - so 8 hour day means divide all those expenses by a third - its never so good once time is applied.
- davey_g0
Get a good CPA for starters, will help with the loose ends and lend expertise...it's well worth it. I write off approx. 30% of my mortgage, power, water, internet, gas, phone. The self employment tax law is all based on dividing your sq. footage by your work space...but do you ever have clients come by? Do they use the bathroom, do you get them a drink? There's some flexibility, just don't push it.