Catherine Raker of Cendrowski Corporate Advisors answers the question: How to calculate home office expenses?
Join us for another insightful episode of the Cendrowski Business Minute, where tax expert Catherine Raker from Cendrowski Corporate Advisors shares valuable knowledge on how to calculate home office expenses. If you're wondering how to accurately determine these expenses, Catherine provides two methods to help you navigate the process effectively.
Catherine explains that there are two primary methods: the simplified method and the regular method. For the simplified method, you need to identify the specific space in your home designated solely for your home office activities. Then, you calculate the square footage of that space and multiply it by the IRS-set rate of $5. However, it's essential to note that the IRS imposes a maximum limit of 300 square feet when using the simplified method.
Alternatively, the regular method involves determining the ratio of your designated home office space's square footage to the entire home's square footage. You then multiply that ratio by the specific expenses incurred for the home, such as utilities and property tax. This method is more complex and time-consuming compared to the simplified method. Additionally, if you opt for the regular method, you may be eligible to claim depreciation expenses for your home office. However, it's crucial to consider that when you sell your home, the depreciation deduction may impact the overall gain on the sale.
Host Dave Lorenzo acknowledges Catherine's expertise and highlights the importance of seeking professional advice on how to calculate home office expenses. To receive personalized assistance and guidance, he encourages viewers to contact Catherine Raker at Cendrowski Corporate Advisors by calling 866-717-1607.
Stay informed and make informed decisions about how to calculate home office expenses. Subscribe to our channel for more valuable business tips and expert advice from Cendrowski Corporate Advisors, a CPA firm with a unique perspective.
Timestamps:
0:00 Introduction
0:30 Understanding how to calculate home office expenses
1:55 The simplified method and its limitations
2:35 The regular method and its complexities
3:10 Considerations for depreciation expenses
3:45 Contact Catherine Raker at Cendrowski Corporate Advisors
4:15 Subscribe for more business tips
#CalculateHomeOfficeExpenses #HomeOfficeDeductions #CendrowskiBusinessMinute #HowToCalculateHomeOfficeExpenses
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