It’s Labor Day, and while many U.S. workers are relishing the extra day off, I’m working.
But I’m not complaining. I’m perched in a comfy chair on the porch of a simple cottage overlooking a shimmering pond, a herd of horses, and the hazy-blue-toned Shenandoah Mountains in the distance. The morning mist is cloying and no kidding, in the distance, I can hear a rooster proudly announcing the dawn.
Not a bad place to work. My commute–less than 15 seconds.
I run my own media business, and I choose to make my office wherever my laptop will roam. My life is so much better since I quit working in an office over a decade ago.
For others, the choice to commute or telecommute is not quite as tidy.
With the Labor Day holiday top of mind, I thought it would be a good time to revisit one of my favorite workforce related topics- working from home. I wrote about this topic earlier this year in this post for Forbes contributor Next Avenue.
Here is a rundown of ten things you need to keep in mind to make working from home a success.
1. Set aside a specific place exclusively for work. You’ll be able to deduct it from your taxes and it will help you psychologically.
As Richard Eisenberg wrote in Secrets of Claiming a Home-Office Deduction, although an estimated 26 million Americans have home offices, just 3.4 million taxpayers claim home-office deductions. Eisenberg notes, and, I agree, that many people with home offices skip the tax breaks because they’re worried the write-offs will spark a tax audit. That’s not really the case these days. But you must file Form 8829, Expenses for Business Use of Your Home. You can read all the home office rules in IRS Publication 587.
In general, to write-off home-office outlays, you must use the “area” for work only and on a regular, or constant basis, either as your primary place of business or a setting to meet with clients or to do paperwork, say, invoicing, ordering supplies, and phone calls. I suggest you snap a pic of the space, too, so you have a record in case the IRS is ever curious.
If you’re a full-time employee at a business, you will only qualify for the deductions if the company doesn’t provide you with an office.
You should be able to write off 100 percent of costs associated exclusively with your home office, everything from buying a work computer to office supplies. The other kind of deductible home-office expenses are “indirect” ones that are pro-rated, based on the size of your home office. These are things like your mortgage or rent, insurance, and utility bills.
In general, if the square footage of your home office equals 10 percent of your home’s, you can claim 10 percent of these expenses.
If that sounds like a lot of paperwork, the IRS announced a new short-cut or “safe harbor” rule earlier this year, which allows you to deduct $5 per square foot of your home office on your return, with a maximum write-off of $1,500 (based on a maximum of 300 square feet). You won’t be able to depreciate the part of your home used for business, though, if you go this route. If your write-offs would top $1,500 or your home office is bigger than 300 square feet, you can still claim your home-office deductions based on actual expenses.
Read Full Article Here: http://www.forbes.com/sites/kerryhannon/2013/09/02/10-tips-for-working-from-home/#64f67962290a
Related Blog: Live and Work at Home