How to Maximize Your Home Office Deduction for Your S Corporation

TLDRLearn how to effectively claim a home office deduction for your S Corporation by understanding accountable plans, calculating the deduction amount, and the process of getting the write-off for your taxes. Keep records of your expenses, reimbursements, and ensure not to double-dip on deductions. Also, take advantage of the business mileage benefit.

Key insights

💼An accountable plan is essential for reimbursing employees for expenses, including home office costs.

🧮The home office deduction is calculated by multiplying the percentage of your home used for business by your living expenses.

💰To get the home office write-off, transfer money from your S Corporation to your personal account with 'home office deduction' in the description.

📝Keep thorough records of utilities, mortgage payments, property taxes, rent payments, and leases for substantiating your home office deduction.

🚗When you leave your home for business purposes, track the mileage as this counts as business mileage.

Q&A

What is an accountable plan?

—An accountable plan is a written document that allows a company to reimburse employees for business expenses, such as home office costs.

How is the home office deduction calculated?

—Multiply the percentage of your home used for business by your living expenses to calculate the home office deduction.

How do I get the home office write-off?

—Transfer money from your S Corporation to your personal account on a monthly or quarterly basis, making sure to specify 'home office deduction' in the description.

What records should I keep for the home office deduction?

—Keep records of utilities, mortgage payments, property taxes, rent payments, and leases to substantiate your home office deduction.

How can I benefit from business mileage?

—Whenever you leave your home for business purposes, track the mileage as this counts as business mileage and can be deducted.

Timestamped Summary

00:00To maximize your home office deduction for your S Corporation, there are four things you need to know: 1) accountable plan, 2) calculation method, 3) reimbursement process, and 4) additional information.

00:25An accountable plan is a written document that allows the company to reimburse employees, including for home office expenses.

01:27The home office deduction is calculated by multiplying the percentage of your home used for business by your living expenses.

06:11To get the home office write-off, you need to transfer money from your S Corporation to your personal account and mention 'home office deduction' in the description.

07:06Keep thorough records of utilities, mortgage payments, property taxes, rent payments, and leases to substantiate your home office deduction.

09:23Whenever you leave your home for business purposes, track the mileage as this counts as business mileage and can be deducted.

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