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Oct 27, 201404:31 PMSmall Business, Big Ideas

with Jean Willard

5 tax-planning opportunities to think about right now

(page 2 of 2)

4. Understand the new home office deduction safe harbor: You can deduct some of the cost of your home if you use your home as your principal place of business, if you use it to meet clients and customers in the normal course of business, or if your office is a separate structure not attached to your home. The amount of this deduction has long been a source of controversy, but the IRS has a new safe harbor this year that allows you to deduct up to $5 per square foot of home office space up to $1,500 per year.

5. Maximize “above-the-line” deductions: Above-the-line deductions are valuable because you deduct them before you calculate your AGI. They are allowed in full and make it less likely that your other tax benefits will be limited. Common above-the-line deductions include traditional IRA and health savings account (HSA) contributions, moving expenses, self-employed health insurance costs, and alimony payments.

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