Home office deduction amount and form to put the deduction on for 2018 draft forms? Joyce's...

Home office deduction amount and form to put the deduction on for 2018 draft forms?

Joyce's office is located in a separate room in the house ad occupies 375 sq. ft. The total square footage of the house is 2,500sq.ft. The Schnappaufs purchased the home 7/3/04 for $70,000. The local practice is to allocate 10% of the purchase price to land. The depreciation percentage for the office is 0.02564. When Joyce startsd her business on 1/1/2010, the fair market value of the house was $108,000. The total household expenses for 2018 are as follows:

Heat: 2170, Insurance: 1480, Electricity: 740, Repairs to kitchen: 3100, Cleaning: 1560.

Expert Solution

Step 1: Figure out the business percentage for your home office
A	Total area of your home (in square feet)	2500
B	Area of your home office space (in square feet)	375
C	Business percentage of home: (B/A)	15%


Step 2: Calculate the percentage of indirect expenses

	Indirect Expenses:
	Property insurance	1480
	Utilities	740
	Other indirect expenses (include detail):
	Heat	2170
	Cleaning service	1560
	Total indirect expenses	5950
	Multiply total indirect expenses by business % __	892.5
	* Repairs to Kitchen is not allowed as expenses exclusively for home


Step 3:	Calculation of Depreciation Expenses

	Purchase price of your home	70000
	Less: Cost of Land i.e. 10%	7000
	Cost Basis just your home	63000

	FMV of the house	108000
	Less: FMV of the land (i.e. 10%)	10800
	FMV just your home	97200

	*Take the lesser of the adjusted basis or the FMV to use as your depreciation calculation starting point

	Basis of Building	63000
	Business Basis of the house	9450
	Depreciation %	2.564%
	Depreciation allowable	242.30




Step 4:	Home Office Deduction

	Indirect Expenses	892.5
	Depreciation allowable	242.30
	Total Home Office Deduction	1134.8

ekkarill92 answered 3 years ago

Review the advantages and disadvantages of the Simplified Method for determining the office in the home deduction

Review the advantages and disadvantages of the Simplified Method for determining the office in the home deduction. Create a brief summary of your findings, and e-mail it to your instructor.

Discuss whether either of the following individuals are entitled to an office-in-home deduction: a. Maggie is...

Discuss whether either of the following individuals are entitled to an office-in-home deduction: a. Maggie is a self-employed management consultant who maintains an office in her home exclusively used for client meetings and other business-related activities. Maggie has no other place of business and her office is the most significant place for her business. She has substantial income from the consulting practice. b. Bobby operates his own sole proprietorship as an electrician. He maintains an office at home where he...

5. Home-office deduction - Chad works for his employer 100% of the time from his home...

5. Home-office deduction - Chad works for his employer 100% of the time from his home office. There is a desk for him at work but he is allowed to choose where he works from. He also operates a side business for which he is self-employed. He works from the same home office and does all of his self-employed related work there. Is Chad allowed a home-office deduction for either, both or none of these situations?

Determine the amount of the standard deduction allowed for 2018 in the following independent situations. In...

Determine the amount of the standard deduction allowed for 2018 in the following independent situations. In each case, assume the taxpayer is dependent of another taxpayer. a. Mason, aged 18, has income as follows: $1,900 from a paper route and $10,800 from repairing computers. $ b. Emma, aged 17, has income as follows: $950 in cash dividends from a stock investment, $5,100 from providing dance lessons, and $1,700 from babysitting. $ c. Samuel, aged 13, has income as follows: $100...

30.) Determine the amount of the standard deduction allowed for 2018 in the following independent situations....

30.) Determine the amount of the standard deduction allowed for 2018 in the following independent situations. In each case, assume that the taxpayer is claimed as another persons dependent. a.) Curtis age 18 has income as follows:$700 interest from a certificate of deposit and $12,200 from repairing cars. b.) Mattie, age 18 has income as follows:$600 cash dividends from a stock investment and $4,700 from handling a paper route. c.) Jason age 16, has income as follows:$675 interest on a...

Explain the home office expense deduction. In your answer you must discuss the regular method and...

Explain the home office expense deduction. In your answer you must discuss the regular method and the simplified method. Also explain the deductibility of home office for an employee whose employer requires them to work from home.

3. Following data on adjusted income and reasonable itemized deduction amount of 1040 Form is published...

3. Following data on adjusted income and reasonable itemized deduction amount of 1040 Form is published by IRS. (20 points) Adjusted Gross Income ($1000) in 1040 Reasonable itemized reduction amount ($1000) 22 9.6 27 9.6 32 10.1 48 11.1 65 13.5 85 17.7 120 25.5 Which variable is the predictor (X) and which is the response (Y)? Find the least-square regression line y=a+bx Plot the data and your least-square line in one graph. Do you think that the regression line...

What is the tax consequence and correct deduction for this scenario. Where on the tax draft...

What is the tax consequence and correct deduction for this scenario. Where on the tax draft forms does this deduction go? The Schnappaufs incur the following medical expenses (before considering the $700 reimbursement they receive from their health insurance policy): medical premiums 3800 doctors 1200 chiropractor 650 dentist 1900 vet fees (family dog sandy) 350 prescription drugs 340 over the counter drugs (aspirin, cough syrup) 175. In addition, Bill purchases an Exsoaligner machine for $700. The machine was recommended by...

To furnish the home office, Ms. Smith spent $5,000 on office furniture on January 1, 2018....

To furnish the home office, Ms. Smith spent $5,000 on office furniture on January 1, 2018. Ms. Smith was getting tired of the dated bathroom on the top floor of the house and decided to renovate it for a cost of $25,000. Can you claim the $25000 bathroom renovation being the business is mostly ran in the basement on nights and weekends?

Determine whether the following taxpayers are eligible for the QBI deduction and the deduction amount (if...

Determine whether the following taxpayers are eligible for the QBI deduction and the deduction amount (if any). Cathy is married and files a joint return with her spouse. Cathy operates a small family restaurant as a sole proprietor. She pays wages of $70,000 and the QBI from the restaurant is $100,000. Cathy’s spouse has wages of $250,000 and their joint taxable income is $364,000. Is Cathy eligible for QBI deduction? Answer yes or no If eligible, how much is the...

Question