Announcement

Collapse
No announcement yet.

Home office deduction

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Home office deduction

    Seems no matter what we do, we cannot get any benefit out of counting a dedicated room as a home office which we do use for a full time job. From what I understand, it's because you can only deduct any expense exceeding 2% of the AGI. Am I understanding it correctly? If that is the case, it seems ridiclulously hard to claim this deduction with AGI of physicians?

  • #2




    Seems no matter what we do, we cannot get any benefit out of counting a dedicated room as a home office which we do use for a full time job. From what I understand, it’s because you can only deduct any expense exceeding 2% of the AGI. Am I understanding it correctly? If that is the case, it seems ridiclulously hard to claim this deduction with AGI of physicians?
    Click to expand...


    If you are an employee (W2), the home office deduction is added to your other employee business expenses, investment management costs, etc. and, yes, must overcome the 2% of AGI haircut before deduction. You are correct that it is difficult for employed physicians to get any benefit without a really nice, large HO in an expensive home.

    A really good option is to negotiate with your employer for the employer to reimburse you for the use of your home via an "accountable plan", even if it means offsetting with a small part of your salary. The payment is deductible to the employer and nontaxable to you, the employee.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

    Comment


    • #3
      Thank you for the clarifications and suggestion!

      Btw the HO is my for my spouse' full time job only, but since we are filing jointly, the 2% AGI is based on our combined income and not hers only, correct?

      Seems very difficult to have any decent deduction as a normal w2 employee. Already maxing out tax-efficient contributions but still got a huge tax bill. And first time encountering AMT and realizing our high property tax is not even deductible! Bummer.

      Comment


      • #4


        Btw the HO is my for my spouse’ full time job only, but since we are filing jointly, the 2% AGI is based on our combined income and not hers only, correct?
        Click to expand...


        Yes, that is correct (unfortunately). Is it possible to talk your employer into setting up an accountable plan?


        Seems very difficult to have any decent deduction as a normal w2 employee. Already maxing out tax-efficient contributions but still got a huge tax bill. And first time encountering AMT and realizing our high property tax is not even deductible! Bummer.
        Click to expand...


        Yes, it is. Focus on the comprehensive plan and overall mission - net growth of wealth to be used to accomplish your goals. Tax savings is only one means, not the end. There are many means to grow your wealth and not all are tax-efficient.

         
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

        Comment

        Working...
        X