The IRS announced (Rev. Proc. 2013-13) a safe harbor method that individual taxpayers have the option of using to determine the amount of deductible expenses attributable to certain business use of a personal residence. The safe harbor method is effective for taxable years beginning in 2013. The IRS has stated that the current computation of the home office deduction is complex and is hoping that the safe harbor method will reduce taxpayer compliance.
The requirements that the taxpayer must use the home office exclusively and on a regular basis as the taxpayer’s principal place of business or as a place to meet with the taxpayer’s patients/customers/clients remain unchanged. Likewise, if an employee deducts a home office expense, the IRS requirement that the home office is required by the employer for the convenience of the employer remains a requirement.
The taxpayer computes the home office deduction by [Read more…] about IRS ANNOUNCES HOME OFFICE SAFE HARBOR