Top five ways to make sure that you get audited by the IRS (Part #5: home office deduction)
Updated: Jan 30
Feeling lonely? How about a visit from the IRS?
You might think the IRS has a building full of auditors peering over your tax return and waiting for you to slip up. Well, they do, but in recent years the IRS has focused on finding compliance errors that are easy to spot and simple to enforce. It might take the IRS a year or more to catch up with you, but when they do you will owe not just the back taxes, but also fines and interest that might add up to more than the taxes you skipped paying. But if you still really want to get the IRS’s attention, you can read this series on how to make certain they notice you.
#5. Home office deduction
Just because you worked from home, does not mean that you can write off your home office expenses. You must also prove that your home office is exclusively and regularly where you work and that the area is separate and only used for business - your kitchen table doesn’t count. If you are a W2 employee, don’t even think of trying to write off business expenses such as a home office, utilities, or internet - even if you had to work from home due to Covid. This is a very easy tax dodge for the IRS to spot, and when they do, they’ll come looking for all the other ways you might be holding out on them.