Page 18 • December 24, 2020 • Edmond Life & Leisure
Arledge & Associates Q&A
A look at the home office deduction
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Are there multiple methods to claiming the home office deduction? Yes, there are two methods to claiming a home office deduction. he first method is the Simplified Option for Home Office Deduction. This method allows you to claim up to a maximum amount of 300 square feet of home office space and take a deduction of $5 per square foot. The maximum deduction in this scenario is $1,500. The second method is the Regular Method. This is generally deductions under this method are based on the percentage of your home devoted to your business use.
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By Josh Mullins For tax purposes self-employed individuals are allowed to take a deduction for a home office if this is your primary place of your business and you must regularly and exclusively use the space for your business.
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May I take the home office deduction as an employee since I work remotely now due to COVID19? Unfortunately, employees are not eligible to take the home office deduction. In some instances the employer may provide reimbursement policies for expenses you incur due to working from home but those are decided by each and every employer. Also, something to consider, if you are working from home and your home state is different than the state the business operates in you should talk to your employer and your tax preparer about making sure your state withholdings are in the correct state.
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What type of expenses can I take through the regular method? Per the IRS, you may deduct mortgage interest, insurance, utilities, re-
From Page 17 class. “One of our initiatives at The Boldt Company is to inspire and educate future leaders about the many careers open in the construction field. We’re excited so many young people can be exposed to futures that use STEM skills,” said Tony Yanda, Senior Director of The Boldt Company, “It’s exciting to see the skills and abilities our Cristo Rey OKC student workers develop as they are exposed to more opportunities.” Cristo Rey OKC began in 2018 and oversees the educational and career development of students with limited resources. Out of those 232 students, however, 77 of them are without a business partner —
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Josh Mullins, CPA, is a partner at Arledge and Associates, PC, an Edmond-based accounting firm. Arledge and Associates, PC is a recognized leader in the accounting industry offering practical solutions in the areas of tax planning, auditing, consulting, accounting advisory services and client accounting. Through its Gateway Executive Solutions division, the firm offers outsourced CFO, controller and cloud-based accounting solutions. This article contains general information only and does not constitute tax advice or any other professional services. Before making any decisions or taking any action that might affect your income taxes, you should consult a professional tax advisor. This article is not intended for and cannot be used to avoid future penalties that may be imposed by the Internal Revenue Service.
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pairs, maintenance, depreciation, and rent. These expenses must be allocated based on the percentage of your home devoted to your business use. Also, keep in mind that when you take depreciation expense, if you sell your residence in the future you may have to report income from the sale of your home for the percentage of your home you used as a business because of the depreciation expense you used. This would be different than people who do not claim a home office deduction because many time people are able to take the primary residence deduction to offset the gain on the sale of a personal residence. Please discuss this with your tax preparer. One last thing - please keep in mind that to qualify for this deduction, per the IRS, “There must be exclusive use of a portion of the home for conducting business on a regular basis.” You must be cautious about using common areas of your home for the home office deduction because of this rule.
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keeping them from receiving on-thejob training that not only propels their personal and professional skills, but diminishes the reason they chose to attend Cristo Rey OKC in the first place. “We are calling on our Oklahoma City community to support our students — our future workforce — in this time of need,” Carter said. “When businesses choose to partner with our school, they receive topnotch talent at a highly-competitive rate, in addition to the satisfaction of contributing to a student’s brighter future.” For more information or for businesses interested in becoming a Corporate Work Study Partner, visit CristoReyOKC.org/work-study.
DC Foundation makes a $100,000 donation The Deer Creek Schools Foundation recently awarded $100,000 to Deer Creek Schools for technology. The grant will be used to address an increased need for student technology in the district, as a result of COVID19 and online learning. “In a year that has been full of changes and challenges, the Deer Creek Schools Foundation is proud to be able to support our students’ needs so they have access to the devices they need for learning. In this moment, creating access is key,” said Jennifer Elliott, Foundation Board President. The school district plans to use the grant to order approximately 360 devices, such as IPads and Google Chrome Books, for students.
“This grant really helps our Deer Creek families and our students who are learning from home. Having enough devices for our students is our most critical need. Because of this generous funding, by January we will be close to a 1:1 student-to-device ratio,” said Ranet Tippens, Superintendent of Deer Creek Schools. The Deer Creek Schools Foundation Board is a nonprofit organization, composed of parent volunteers, who raise money to support Deer Creek Schools. The Deer Creek Schools Foundation also annually funds college scholarships for graduating seniors and honors its alumni and supporters. Visit dcsfoundation.org for more information.