Recent Tax Updates

Additional 2013 Federal Tax Changes

August 11, 2013

In order to reduce taxpayer burden, the IRS has added the following new options to Schedule C and Schedule D:

Home Office Deduction — New Simplified Method
This new simplified method has been added to Schedule C and may be used by taxpayers that use 300 square feet or less of their home for business purposes.

Here are highlights of the simplified method:

  • Uses flat deduction amount of $5 per square foot to calculate the expenses for business use of your home on Schedule C, line 30.
  • If simplified option is used, then Form 8829 (Expenses for Business Use of Your Home) does not need to be completed.
  • Allowable mortgage interest and property taxes may be claimed in full on Schedule A if the simplified method is used.
  • A depreciation deduction may not be claimed for years that the simplified option is used.
  • If the home office expense that is calculated using the simplified method is limited because it exceeds the business gross income, the excess may not be carried forward to a future year. Under the regular method any excess can be carried forward.
  • You may choose to use either the simplified method or the regular method (complete Form 8829) for any taxable year. This means you can switch back and forth each year.

For more details see the Simplified Option for Home Office Deduction.

Aggregate Transaction Reporting on Schedule D
(Capital Gains and Losses)
For stock sales, if the basis that is reported on the Form 1099-B (Proceeds From Broker and Barter Exchange Transactions) is correct, then the totals of all of these transactions may be reported directly on Schedule D on new lines 1a or 8a instead of completing Form 8949 (Sales and Other Dispositions of Capital Assets).