Can You Deduct Your Home Office

If you run your business at home, which means you regularly work from a home office, and that space is reserved for business use, you can deduct it.  This is true if you own or rent. It is also true if you live in a house, apartment, condo, boat, etc. You can deduct the percentage of your mortgage or rent that is equal to the percentage of the home office space relative to your whole home.

The tax software that I use will calculate that  space as a percentage of your total home. It will also calculate a percentage of utility bills. So if you rent or mortgage is $1,000 a month, and your home office space comes out to 10% of the square feet of your dwelling, then $100 a month, or $1,2000 would be your deduction. Furthermore if you add up your utilities like heating, water, etc. to $3600 a year, then you can deduct another $360 as a business deduction. I am NOT a tax professional. I am just telling you want my tax software calculates.

Now remember,  you must use this area for your business. The IRS also allows a less restrictive “home storage” deduction. If you do not meet the home office requirements, then  you may be able to meet the home storage requirements.

home office deduction, home business tax, small business deductibles

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This entry was posted on Thursday, February 7th, 2008 at 1:18 pm and is filed under Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.