Deductible Home Offices
Whether you are self-employed or an employee, if you use a portion of your
home exclusively and regularly for business purposes, you may be able to
take a home office deduction.
You can deduct certain expenses if your home office is the principal place
where your trade or business is conducted or where you meet and deal with clients
or patients in the course of your business. If you use a separate structure
not attached to your home for an exclusive and regular part of your business,
you can deduct expenses related to it.
Your home office will qualify as your principal place of business if you use
it exclusively and regularly for the administrative or management activities
associated with your trade or business. There must be no other fixed place
where you conduct substantial administrative or management activities. If you
use both your home and other locations regularly in your business, you must
determine which location is your principle place of business, based on the
relative importance of the activities performed at each location. If the relative
importance factor doesn't determine your principle place of business, you can
also consider the time spent at each location.
If you are an employee, you have additional requirements to meet. You cannot
take the home office deduction unless the business use of your home is for
the convenience of your employer. Also, you cannot take deductions for space
you are renting to your employer.
Generally, the amount you can deduct depends on the percentage of your home
used for business. Your deduction will be limited if your gross income from
your business is less than your total business expenses. Please contact
us for more!