What tax savings ideas can be proposed to her

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Reference no: EM133120998

Question - Karen performs bookkeeping for her 10 clients and spends about 4 hours per client each week at the client's office. She also has a dedicated office at her home where she does all of her administrative work for her business. The administrative work she performs is at her home office to include billing, record keeping, and training.

Total area of home: 5000 square feet

Area of her home used for the business: 500 square feet

Annual direct costs: 1) gross income from the business $100000 2) deductible mortgage interest $25000 3) real estate taxes $1500 4) utilities $2500 5 )ignore depreciation

Required -

1 - What tax savings ideas can be proposed to her?

2 - If Karen is entitled to a deduction, what forms are used to compute the deduction?

3 - Attach the COMPLETED forms that should go with her 1040.

Reference no: EM133120998

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