280A
Definition:
Section 280A of the Internal Revenue Code governs the **deductibility of expenses related to the business use of a home or dwelling unit**. It allows taxpayers to claim deductions for a portion of their home expenses if part of the home is used exclusively and regularly for business purposes, subject to specific limitations and qualifications.
280A Information
Under Section 280A, taxpayers may deduct expenses such as mortgage interest, utilities, insurance, repairs, and depreciation that are attributable to the business use of a residence. To qualify, the portion of the home must be used **exclusively and regularly** as one of the following:
– The taxpayer’s principal place of business;
– A place where the taxpayer meets or deals with clients, patients, or customers in the normal course of business; or
– A separate structure not attached to the home that is used in connection with the business.
The deduction is generally limited to the amount of income generated from the business use of the home. Unused deductions may be carried forward to future years. Employees (who are not self-employed) may not claim this deduction unless they meet strict conditions, such as use for the convenience of the employer.
Florida Legal Definition
In Florida, Section 280A is applied in accordance with **federal tax law**, as Florida has no personal income tax. Florida taxpayers who are self-employed or operate home-based businesses may claim the federal home office deduction if they meet the eligibility requirements set by the IRS.
The deduction is particularly useful for Florida’s many small business owners, independent contractors, and remote professionals. Eligible expenses must be prorated based on the portion of the home used for business versus personal purposes.
How It’s Used in Practice
In practice, business owners, freelancers, and remote workers use the 280A deduction to offset business-related home expenses. Taxpayers can calculate the deduction using either the **simplified method**—$5 per square foot of qualified business area up to 300 square feet—or the **actual expense method**, which allocates actual home expenses based on business-use percentage.
Tax professionals often advise maintaining floor plans, receipts, and photographs to substantiate the exclusive business use requirement in case of an audit. IRS Form **8829 (Expenses for Business Use of Your Home)** is typically filed to claim the deduction.
Key Takeaways
- Section 280A allows deductions for home expenses related to the exclusive and regular business use of a residence.
- Applies to self-employed individuals, independent contractors, and small business owners.
- Expenses such as utilities, mortgage interest, insurance, and depreciation may qualify.
- Florida taxpayers follow federal 280A rules since the state has no income tax.
- Two calculation methods exist: the simplified method ($5 per sq. ft.) and the actual expense method (percentage-based).
- Proper documentation and exclusive business use are required to substantiate the deduction.
Disclaimer: The information and opinions provided are for general educational, informational or entertainment purposes only and should not be construed as legal advice or a substitute for consultation with a qualified attorney. Any information that you read does not create an attorney–client relationship with Barnes Walker, Goethe, Perron, Shea & Johnson, PLLC, or any of its attorneys. Because laws, regulations, and court interpretations may change over time, the definitions and explanations provided here may not reflect the most current legal standards. The application of law varies depending on your particular facts and jurisdiction. For advice regarding your specific situation, please contact one of our Florida attorneys for personalized guidance.
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