"John Smith" <john[at]jon.com> wrote:

- quote -

Sort of makes me wonder how the company survives since I
presume that most of the employees work in the "too small"
space provided by the company and use the "obsolete
software" that you feel will not allow you to do your job
properly. It's hard to believe that your rejection of
Office 2000 and Windows 2000 in favor of Office 2003 and
Windows XP is anything but a personal preference, rather
than a requirement of your job.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

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L K Williams wrote:

- quote -

I am in agreement with this answer. based on the facts
presented, the t/p fails the exclusive use test. In addition, as
mentioned by others the employee's business use must be at the
convenience of the employer.

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Based on your fact situation, I'd say:

1. You have a strong, legitimate home office deduction and
as long as you have the appropriate documentation to verify
your deduction, then don't worry about your return getting
flagged for an audit. However, you should get your employer
to issue you a statement on company letterhead concerning
the "Ordinary and necessary.." and "Required as a condition
of your..." requirements. Do this now rather than later
during an audit when you may no longer be working for your
current employer, esp. if you leave on bad terms.

2. No, you would deduct those expenses as unreimbursed
employee expenses on Form 2106 or 2106-EZ, which carries
over to Schedule A, line 20. However, your expenses will
need to be greater than 2% of your adjusted gross income
(Schedule A, line 24 and 25).

Rudy
www.LizcanoTaxServicesLLC.com

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John Smith wrote:

- quote -

Did that ever come up in your performance reviews? (namely,
that the paucity of resources provided by your employer were
hurting your ability to do your job?)

?In addition, the employer
- quote -

How you figure "two generations"? The changes between MS
2000 and MS 2003 are mostly negligible window dressing.
Anyone who can use one version can easily use the other.

- quote -

What about guests in the guest bedroom?

- quote -

As long as she has some liveliness left...that's what
counts!

Bottom line: claim all the deductions you are entitled to.
If you want some insurance, hire a paid preparer who will
guarantee their work.

-Mark Bole

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John Smith wrote:

- quote -

Cut to the chase. If your employer REQUIRES you to have a
home office, then you have a case. Best advice is to nail
that down and get it in writing.

ChEAr$,
Harlan Lunsford, EA n LA
Tue 21 Mar 2005 [at] hh

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John Smith" <john[at]jon.com> wrote:

- quote -

It looks to me like your home office fails the "solely and
exclusively" requirement of the code. You say that "at
night the computer is used for personal matters as well" and
that you only use it "exclusively during business hours."
The business hours qualification is yours, not the code's.
The code requirement for the specific usage is absolute and
ANY personal use of the space destroys the deduction.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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Home Office / Unreimbursed Employee Business Expense

I work for a large business entity as a strategic director
and earn 80K per year. I recieve a W-2. When I began working
for them in 2004 I was part-time (60%). I was given only a
cubicle for my work area because the employer is short of
space, a phone and a notebook PC. The small 5-foot cubicle
was clearly insufficient for the work I was doing. However,
I was provided business cards w/the address there, a phone,
and a nameplate on the cubicle.

I have always worked at home. The deficiencies - I need
several printers and a large work area to develop desktop
presentations. I was issued a notebook, but it lacked the
large screen I needed to develop major presentations, lacked
the power to run multiple industrial strength applications
and was generally insufficient. In addition, the employer
uses Office 2000 and Windows 2000 software. My entire skill
set was built on Office 2003 and Windows XP, two generations
of software later and using older software would have made
doing my work far more difficult and time consuming. At
home, I use the 2003 versions.

My boss, who is the Director of the divsion, implicitly
ratified the arrangement, whenI was part-time. He and
everyone else knows I am telecommuting. In 2006 I became
fulll time. I then continued to work from my home, going to
several other locations twice a week,ie. for a meeting w/my
boss and for a conference with other on the team. My cubicle
has never been used. I have never even picked up the phone
there.

One section of my house, the guest bedroom is used
exclusively for my work for this employer. Of course, at
night the computer is used for personal matters as well, but
again I only use if primarily for business and exclusively
during work hours. I am effectively a defacto telecommuter.
I work at home 95% of each week. I never have occasion to
meet clients. There is only business equipment in her.

The questions are:

1. Do I have any argument on deducting part of my house as a
home office or am I precluded by the existence of the
cubicle I was issued? Is the argument weak or strong? Is it
worth the risk of red flagging the return? In 2005, the
deduction would be 20% of 1800 rent, 20% of the utilities
including cable modem, perhaps 200 per month.

2. Even if the answer to question 1 is no, may I deduct,
independently of the home office deduction, the purchase of
computer upgrades such as a monitor or hard disk drive and
computer software as unreimbursed employee expenses using
Section 179.

Note also I answered the following? s in the affirmative:

... Ordinary and necessary - this is almost self-evident

... Required as a condition of your - i.e. I cannot properly
perform my duties with the computer that I am using in my
home office. Obsolete software, lack of space.

... For the convenience of your employer - i.e., it is for a
substantial business reason of your employer - to use the
computer or cellular phone and space during business hours
to carry on my employer's business, generally deemed to be
for the convenience of your employer.

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