Home-based workers may be eligible to deduct some or all of the costs associated with maintaining a home office from their taxable income. But is it possible to deduct the cost of two offices located in the same house? In contrast to a previous evaluation made by the tax office, the Düsseldorf Finance Court has now decided that the answer is yes.
A pair that is not married lives in a detached property that is currently available for rent and has a floor space of around 150 square metres. Due to the fact that they both work from home, they have two offices, each of which is 15 square metres in size. The self-employed individual included his education costs in his 2018 tax return as deductible “income-related expenses.”
Having a home office qualifies as a tax deduction, as does having two offices in the same building.
However, the tax office subsequently indicated that the guy could only claim one-half of the costs that were stated for the purposes of his tax return. Because the employee shares a home with his partner, he is only responsible for paying half of the total costs associated with the office.
Man initiated legal action
Following this, the man initiated legal action, which ultimately resulted in his victory. Because the Düsseldorf Finance Court ruled on September 9, 2022, and the decision has now been published (case no.: 3 K 2483/20 E), the employee is permitted to claim the full costs for the purposes of tax deductions. On the other hand, if you work from home, you can deduct the cost of two offices located within the same building.
Higher home office flat rate in 2023
Employees will be able to deduct higher costs from their taxes beginning in 2023, compared to the years before to that point. This is due to the fact that the lawmaker has chosen to make certain adjustments in the Annual Tax Act 2023. During the current energy crisis, this should bring some respite. According to this, a total of 210 days spent working from home can be deducted from one’s taxable income beginning with this year. A daily charge of six euros applies.
Because of the combination of the two alterations, the so-called home office flat rate will now be 1,260 euros, which is an increase from 600 euros. However, the amount must still be deducted from the fixed-rate expenses that are relevant to the income in question. This will go up once more, although only little, from 1,200 euros to 1,230 euros beginning in 2023.
Why People Go With The Home office
The Home Office plays a fundamental role in business where people mostly earn with the smooth hand by connecting with freelance and online direct client work related to their business market. It can be a lifesaver to have the ability to setup a work station anywhere around the house. If you have the correct pieces of furniture, you can transform any space into a cosy office whenever and wherever you need to.
For people who are self-employed or work for an employer, a home office is a dedicated room within a person’s residence that is used for official business functions. It also gives a place to work from home for those who have this type of arrangement.
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