The Home Office Tax Deduction

More self-employed filers are claiming the home office deduction because IRS eligibility rules have been relaxed in order to allow for this. Even if you have no fixed location for your business you can claim a home office deduction if you use space in your home for administrative or management activities even if your main business activities are done elsewhere. Here are a few initial things you should know:

• You should be using the space exclusively for business.

• You are entitled to deduct expenses such as rent, utilities, insurance, etc.

• The deduction is based on the square footage of the office compared to the total area of the home.

For example, this means that a taxpayer who has a two bedroom apartment and uses one bedroom as a home office exclusively and pays $1000 a month for rent can possibly save at least $1000 in taxes a year. The higher the tax bracket and greater the expenses, the more that can be saved.

If you want to know how this would apply specifically to your situation, click the Contact button in the top right or bottom of the screen to schedule a consultation.