Studio as a tax write-off/home office

If I use one of the rooms in my home as a studio for Micro Stock photography can I write it off as a home office on my tax return? I am not trying to cut corners or get away with something, just curious if this is how it works

Yes, my wife runs a business from our home. It is a full time job and the office is 100% dedicated to the business. It has no home use what so ever. We worked it with our tax accountant to deduct not only the office itself, but a percentage from everything going into the house, utilities, repairs and such. There are some pretty strict rules and setting things up was not simple so I would highly advise seeking the help of a tax professional. But if the room is devoted fully to you buisness and has no other personal use then it can be deducted.

gjl711 wrote in post #6478738
Yes, my wife runs a business from our home. It is a full time job and the office is 100% dedicated to the business. It has no home use what so ever. We worked it with our tax accountant to deduct not only the office itself, but a percentage from everything going into the house, utilities, repairs and such. There are some pretty strict rules and setting things up was not simple so I would highly advise seeking the help of a tax professional. But if the room is devoted fully to you buisness and has no other personal use then it can be deducted.

I will definately do that, thanks for the information! By any chance do you know approximately how much of a write off a home office is?

incendy wrote in post #6478754
I will definately do that, thanks for the information! By any chance do you know approximately how much of a write off a home office is?

It's generally based on a percentage of total square footage...

FlyingPhotog wrote in post #6478760
It's generally based on a percentage of total square footage...

That makes sense, I can't wait to figure this all out. Buying my first home and one of the rooms is going to be just a dark room for stock photography but I still have a day job so not quite sure if it will work out or not.

incendy wrote in post #6478774
That makes sense, I can't wait to figure this all out. Buying my first home and one of the rooms is going to be just a dark room for stock photography but I still have a day job so not quite sure if it will work out or not.

You probably just shot yourelf in the foot a little. The IRS also has rules regarding deductions based on what they deem a "hobby" Vs a full-time profession.

FlyingPhotog wrote in post #6478794
You probably just shot yourelf in the foot a little. The IRS also has rules regarding deductions based on what they deem a "hobby" Vs a full-time profession.

It is still a job just not my full time job but I do hope to make money. No way I can give up my full time job though so if that is a requirement then I am afriad I will not qualify haha

incendy wrote in post #6478754
I will definately do that, thanks for the information! By any chance do you know approximately how much of a write off a home office is?

FlyingPhotog wrote in post #6478760
It's generally based on a percentage of total square footage...

Yup, it's based on the square footage of the room. For us it's 10% or 12%, I can't remember which.

FlyingPhotog wrote in post #6478794
You probably just shot yourelf in the foot a little. The IRS also has rules regarding deductions based on what they deem a "hobby" Vs a full-time profession.

I believe that the rule is that you have to show a profit within the first 3 or 5 years. So you have to make more money than you are declaring as losses and expenses. For my wife it's pretty straight forward as it is her prime business and she is putting in 10, sometimes 12 hours a day and is showing quite a decent profit. Again consult your tax accountant/attorney to make sure you comply with all your local laws and ordinances. Some cities/towns/villages or whatever have issues with home based businesses. We are lucky as we live in an unincorporated area and don't have to deal with all that.

Keep in mind that you'll be deducting the interest on your mortgage as well. On a new 30-year loan, depending on how much you put down, that can be the majority of your house payment.

Dave

tracknut wrote in post #6479722
Keep in mind that you'll be deducting the interest on your mortgage as well. On a new 30-year loan, depending on how much you put down, that can be the majority of your house payment.

Dave

I was trying to figure that out too, seems like I will save a couple of thousand a year! Which is awesome. Every little bit helps, first time home buyer so I am learning all kinds of things, some good and some bad

incendy wrote in post #6481531
I was trying to figure that out too, seems like I will save a couple of thousand a year! Which is awesome. Every little bit helps, first time home buyer so I am learning all kinds of things, some good and some bad

Yup! My point though, just in case you missed it, was that "writing off your den as a business expense" can be virtually identical financially to "writing off the mortgage on your den as a normal write-off", except that doing it for business purposes will require a fair bit more work to prove that you've dotted all your t's and crossed all your i's.

Dave

tracknut wrote in post #6479722
Keep in mind that you'll be deducting the interest on your mortgage as well. On a new 30-year loan, depending on how much you put down, that can be the majority of your house payment.

Dave

incendy wrote in post #6481531
I was trying to figure that out too, seems like I will save a couple of thousand a year! Which is awesome. Every little bit helps, first time home buyer so I am learning all kinds of things, some good and some bad

The savings on mortgage are not as large as you think. You do get to deduct it which will lower your gross and if your on the boundary if the 15/25/35 bracket it might change you tax bill several hundred $$ maybe even over a thousand but usually its more a fraction of one single monthly payment.

gjl711 wrote in post #6481621
The savings on mortgage are not as large as you think. You do get to deduct it which will lower your gross and if your on the boundary if the 15/25/35 bracket it might change you tax bill several hundred $$ maybe even over a thousand but usually its more a fraction of one single monthly payment.

It is sounding more and more like it might just not be worth the effort. Oh well, I will have a dark room finally regardless. It was getting a bit rough having to convert my living room back and forth daily

incendy wrote in post #6481859
It is sounding more and more like it might just not be worth the effort. Oh well, I will have a dark room finally regardless. It was getting a bit rough having to convert my living room back and forth daily

I wouldn't say that, every penny you get too keep is worth it. I have no problem paying my fair share of taxes, but no way am I going to give the gov a penny more than I have to.