Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.
Q: We have a complete office in the home with computers, typewriters, a fax machine and printer. We do volunteer work for church and other organizations from the home. Are we entitled to the home office deduction?
A: No. To qualify for the home office deduction you must be in a trade or business. Even with a full-fledged business, the home office deduction is very difficult to claim, thanks to a Supreme Court ruling. But if you itemize your deductions on your tax return, you can deduct your out-of-pocket expenses for paper, supplies and fax telephone charges that you incurred in your volunteer work for qualified charities. Be sure you have adequate documentation of expenses.
Q: As a Realtor, I was due commissions for the month of December; I did not actually receive them until Jan. 14. Must I declare that as income in 1994 or can I defer it to 1995?
A: Unless you are an accrual basis taxpayer, such as many corporations, you must declare the income on your 1995 tax return because you received it in 1995. If the check had been provided to you in December but you elected not to cash it until January, you would have to declare the income in 1994.
The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.
Members of the Maryland Association of Certified Public Accountants will answer tax questions from readers until April 15 and also offer a Tax Tip of the Week.
To submit a question, call Sundial at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford County 836-5028, and in Carroll 848-0338. Using a touch-tone phone, enter 6225 after the greeting. Push 1 to submit a tax question; state the question in full. Push 2 to hear the tax tip. Selected questions will be answered in the Business section. No questions will be answered by phone.