Tax Time Issues

Hello,

I am a new member and found this website forum while researching tax issues. My question has been asked before, but not recently, I think:

Can an HOA Board Member deduct home office expenses for an area of the unit that is dedicated to business of the HOA?

In my case, this would include my work area with full office facilities where I also store HOA documents, binders, make copies, use the computer, etc. In turbo tax it computes to less @ 2% of my home dedicated to the work space. I know I don't generate income from this business activity but I do engage in it to protect the investment in my home and my community.

I am asking for the experience of others, not legal advice. I plan to finish my taxes and see an accountant for the final blessing before submitting my return. Anyone out there who has personal experience in deducting home office expense for their volunteer HOA board activities? Thank you.

Martha,

Unless your Association is a charitable organization (under IRS rules) - typically not the case - then deduction of mileage, etc. would not be authorized. However, those expenses could be compensated for by the Association as reimbursed expenses.

I'm not a CPA but I concur that since the home office is not being used to make income, I don't think it can be deducted.

Here is a link to the IRS rules for a home office.
Note the "Exclusive Use" requirement. I suspect that you use your office to also pay personal bills, perhaps do shopping on the internet, etc. This, in my opinion, would violate the exclusive use requirement and disqualify the deduction.

Hope this helps,

Tim

I had those Dreams too MarthaD1...Atlas it was not meant to be...You can't deduct for using your home as the HOA office. It's a volunteer corporation and all your sweat equity is as such. Plus throw in the complication that a HOA isn't to allow any businesses operating except for home based businesses and it throws another wrinkle in... Conducting HOA business wouldn't be considered a home business.

Any way you look at it, it's just not deductible. Believe me, I have look at the same issue. I am the "Tax deduction" Queen...LOL.

Martha,

I am not a CPA, but I work for a CPA and I prepare income taxes for some of his firm's clients.

As others have pointed out, and as you have learned, you likely don't qualify for a home office deduction. What others have NOT told you is, even if you did qualify, you likely wouldn't be able to deduct anything anyway, unless your income is very low or your housing expenses are very high. Here's why.

If you owned your own business you would report your business income and business deductions on Schedule C. Your home office deduction would be taken here and would come "off the top" of your business income along with all your other business deductions.

However, since that is not the case, the only way you can claim an home office deduction is to claim it as a miscellaneous deduction on Schedule A (using line 21 or 23). Miscellaneous deductions are subject to a 2% AGI (Adjusted Gross Income) threshold, meaning that you can only deduct that portion of your miscellaneous deductions that exceed 2% of your AGI. So, for example, suppose your AGI is $50,000 (this would be both you and your husband, assuming you are married and filing jointly). Thus, you can only deduct that portion of your in-home office expenses that exceeds $1000. Now, you stated that your "office space" was about 2% of your home. So, your total home expenses (insurance, depreciation, utilities, etc.) would have to exceed $50,000 per year before you could deduct anything. What about mortgage interest and property taxes? You can't include that when calculating your home office deduction because you have already deducted those items elsewhere on Schedule A and you can't take the same deduction twice.

Usually, the only people who can qualify for an in-home office deduction AND can actually deduct anything are those who are self-employed and are filing Schedule C. Other people who are only filing Schedule A usually do not have a high enough office expense to be able to deduct it, even if they DO qualify.

Thank you all for the excellent responses. No deduction for HOA board activities but at least no one will need to visit me in jail!

Interesting way to put it.