| Joseph L. Benish, CPA, PC |
E-mail: joe_benish_cpa@yahoo.com
EXAMPLE of office in home tax savings - -
-personal residence land and building value (lesser
of cost or fair market value at date converted
to business use) $125,000
-less land value 25,000
-gives building value $100,000
-times the percent of business use (divide sq ft of
office by total sq ft of bld) x 10%
-gives a dollar value for office in home $ 10,000
-depreciation expense if put in service 1/1/00
($10,000 divided by 39 year) $ 256
-plus home real estate taxes, mortgage interest
and other expenses for entire bld. - utilities,
insurance, repairs $ 7,000
-times the percent of business use x 10%
-gives business percent of r.e. tax, util, repairs, ins $ 700
-gives total office in home expenses $ 956
-times your estimated tax bracket (10%, 15%, 25%, 28%, 33%, 35%) x 15%
-equals your tax savings if you are in the 15% tax bracket $ 143
Not a whole lot of tax savings for all of the effort in this EXAMPLE. Of course your tax savings
will be more or less depending upon your actual numbers, and your actual tax bracket.
Note: This is only a simplified EXAMPLE, and is not to be used in the preparation of any tax
return. Consult with your personal tax advisor, regarding your particular situation, regarding
office in home rules and filing requirements.
office in home checklist - for EXAMPLE purposes only - consult with your tax advisor
IRS form 8829 expenses for office in home - this form alerts IRS that you have an office
in your home
IRS form 8829 instructions
see IRS publication 529 - with some info on office in home rules
see IRS publication 530 - tax info for first time home owners
-personal residence land and building value (lesser
of cost or fair market value at date converted
to business use) $125,000
-less land value 25,000
-gives building value $100,000
-times the percent of business use (divide sq ft of
office by total sq ft of bld) x 10%
-gives a dollar value for office in home $ 10,000
-depreciation expense if put in service 1/1/00
($10,000 divided by 39 year) $ 256
-plus home real estate taxes, mortgage interest
and other expenses for entire bld. - utilities,
insurance, repairs $ 7,000
-times the percent of business use x 10%
-gives business percent of r.e. tax, util, repairs, ins $ 700
-gives total office in home expenses $ 956
-times your estimated tax bracket (10%, 15%, 25%, 28%, 33%, 35%) x 15%
-equals your tax savings if you are in the 15% tax bracket $ 143
Not a whole lot of tax savings for all of the effort in this EXAMPLE. Of course your tax savings
will be more or less depending upon your actual numbers, and your actual tax bracket.
Note: This is only a simplified EXAMPLE, and is not to be used in the preparation of any tax
return. Consult with your personal tax advisor, regarding your particular situation, regarding
office in home rules and filing requirements.
office in home checklist - for EXAMPLE purposes only - consult with your tax advisor
IRS form 8829 expenses for office in home - this form alerts IRS that you have an office
in your home
IRS form 8829 instructions
see IRS publication 529 - with some info on office in home rules
see IRS publication 530 - tax info for first time home owners
(512) 345-8355