Deduction for Rent if Work at Home?

[KaneKungFu123]

Does anyone know about this possible deduction? I live in a studio apartment and I am self employed poker player.

[mattw]

its a ratio of your work area divided by total square footage. seek qualified acct/tax prep advise.

[cyberSTACK]

You can also discount a certain amount of your power bill, internet bills, etc...

[mackthefork]

You should be able to make a pro-rata deduction for use of home as an office, based on area or some other such sensible criteria, this is certainly the case in the UK.

Mack

[Chadt74]

Be VERY careful as the home office deduction is one of the harder deductions in the tax code to quilify for.

This is also a huge red flag and living in a studio it is going to be a VERY tough since the area must be used ONLY for the business and unless you have a large studio and you have your POKER ONLY area (does not have to have physical barriers) you will not qualify for the deduction.

Of course you can do what you would like but if your area is not exclusively used for poker and poker related activities you run a high chance of getting 'interviewed' by the IRS as this is a red flag deduction since most people do not properly take this deduction.

Good luck.

[mackthefork]

If the 'wholly and exclusively' argument was rigorously enforced very little could be claimed, as it is fairness, and good faith from the tax payer, seem to be the most important considerations. If someone is trying to force through an allowance that is not legitimate then I agree with you though.

In this example say he uses a room 1/8th of the house, 50% business and 50% private, I would claim 1/16th of rent and heating/power as an allowance, it is highly unlikely this would be objected to.

Mack

[Patrick del Poker Grande]

You can do this, but it's often not worth your time and effort to do it. It's not for me or my boss - both of us work from home and neither of us do it.

[voltron.]

i thought rent was like 50$/mo in thailand, whats the big deal?

[mackthefork]

Well i don't know if you are self employed or just an employee, also obviously how valuable your time is would be an issue, that's a fair point, my time isn't worth a great deal (financially), also being an accountant I can sort this out myself, so in that respect I have no problems. the actual act of doing the calculation, which I do for most of my clients takes around 5 mins which ends up costing very little and saves them a reasoble amount in taxes.

Mack

[DuggleBogey]

I've been told this is a huge red flag for getting audited. Anyone know if this is true or urban legend?