Federal Tax

Hello!

I have a client that began working from home during the last three months of 2013. It is a legitimate work from home situation.

Has anyone seen any guidance on using the Safe Harbor method on the 8879 for partial year? Based on their situation, they are one of the few people I have encountered that will benefit from the Safe Harbor method, but I am unsure as to how to calculate for only three months - the three month income does exceed the current safe harbor calculation, but I am looking for any guidance that may be availble to substantiate this method.

thank you for any guidance!
Nicole

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Nicole Odeh
THE SMALL BUSINESS ACCOUNTING SOLUTION
Thorndale PA
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Hello Nicole,

The IRS has published   Rev. Proc. 2013-13    for guidance on this issue.
I took a look for you and understand it as follows:     you compute the average square footage used.  This average is computed in a monthly computation . A month is any month where you use the home office more then 15 days. This % is then applied to the safe harbor amount. which my readings indicate at $5.00   per Sq ft
look on page 8 of the publication  under limitations   .08 (4)

​http://www.irs.gov/pub/irs-drop/rp-13-13.pdf


hope it helps...let us know.

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Abby Alhante
KURCIAS & ALHANTE, CPAs LLC
Woodbury NY
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Original Message:
Sent: 02-23-2014 17:47
From: Nicole Odeh
Subject: Safe Harbor Method - Office in Home Deduction

Hello!

I have a client that began working from home during the last three months of 2013. It is a legitimate work from home situation.

Has anyone seen any guidance on using the Safe Harbor method on the 8879 for partial year? Based on their situation, they are one of the few people I have encountered that will benefit from the Safe Harbor method, but I am unsure as to how to calculate for only three months - the three month income does exceed the current safe harbor calculation, but I am looking for any guidance that may be availble to substantiate this method.

thank you for any guidance!
Nicole

-------------------------------------------
Nicole Odeh
THE SMALL BUSINESS ACCOUNTING SOLUTION
Thorndale PA
-------------------------------------------

Thank you, Abby!

The following example clarified this for me and I can now confidently complete the form using this method- I appreciate your help!

For example, a taxpayer who files federal income tax returns on a

calendar year basis, begins using 400 square feet of his or her home for a qualified

business use on July 20, and continues that use until the end of the taxable year, has

an average monthly allowable square footage of 125 square feet (300 square feet for

each month August through December divided by the number of months in the taxable

year ((300 + 300 + 300 + 300 + 300)/12)).

-------------------------------------------
Nicole Odeh
THE SMALL BUSINESS ACCOUNTING SOLUTION
Thorndale PA
-------------------------------------------






Original Message:
Sent: 02-23-2014 22:35
From: Nicole Odeh
Subject: Safe Harbor Method - Office in Home Deduction

Hello!

I have a client that began working from home during the last three months of 2013. It is a legitimate work from home situation.

Has anyone seen any guidance on using the Safe Harbor method on the 8879 for partial year? Based on their situation, they are one of the few people I have encountered that will benefit from the Safe Harbor method, but I am unsure as to how to calculate for only three months - the three month income does exceed the current safe harbor calculation, but I am looking for any guidance that may be availble to substantiate this method.

thank you for any guidance!
Nicole

-------------------------------------------
Nicole Odeh
THE SMALL BUSINESS ACCOUNTING SOLUTION
Thorndale PA
-------------------------------------------

I read the computation the same.....
and glad to be of help...:)



-------------------------------------------
Abby Alhante
KURCIAS & ALHANTE, CPAs LLC
Woodbury NY
-------------------------------------------






Original Message:
Sent: 02-24-2014 08:19
From: Nicole Odeh
Subject: Safe Harbor Method - Office in Home Deduction

Thank you, Abby!

The following example clarified this for me and I can now confidently complete the form using this method- I appreciate your help!

For example, a taxpayer who files federal income tax returns on a

calendar year basis, begins using 400 square feet of his or her home for a qualified

business use on July 20, and continues that use until the end of the taxable year, has

an average monthly allowable square footage of 125 square feet (300 square feet for

each month August through December divided by the number of months in the taxable

year ((300 + 300 + 300 + 300 + 300)/12)).

-------------------------------------------
Nicole Odeh
THE SMALL BUSINESS ACCOUNTING SOLUTION
Thorndale PA
-------------------------------------------






Original Message:
Sent: 02-23-2014 22:35
From: Nicole Odeh
Subject: Safe Harbor Method - Office in Home Deduction

Hello!

I have a client that began working from home during the last three months of 2013. It is a legitimate work from home situation.

Has anyone seen any guidance on using the Safe Harbor method on the 8879 for partial year? Based on their situation, they are one of the few people I have encountered that will benefit from the Safe Harbor method, but I am unsure as to how to calculate for only three months - the three month income does exceed the current safe harbor calculation, but I am looking for any guidance that may be availble to substantiate this method.

thank you for any guidance!
Nicole

-------------------------------------------
Nicole Odeh
THE SMALL BUSINESS ACCOUNTING SOLUTION
Thorndale PA
-------------------------------------------