Tax: Home Office Deductions

Claiming a Deduction for Business Use of Your Home

(from IRS.GOV last updated on 12/05/11)

 

If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation.

  1. There are two basic requirements for your home to qualify as a deduction:
    • Regular and Exclusive Use.  You must regularly use part of your home exclusively for business.
    • Principal Place of Your Business.  You must use your home as your principal place of business.
  2. If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use if, in addition to the requirements above:
    • Your business use is for the convenience of your employer, and
    • You do not rent any part of your home to your employer and use the rented portion to perform services as an employee
  3. If the use of the home office is merely appropriate and helpful, you cannot deduct expenses for the business use of your home.

Qualification Test:

Types of Expenses:

               

 

 

 

 

 

 

 

 

 

 

 

The following links will provide full explanations of exceptions, instructions, and forms for home deductions but always seek the advice of a qualified tax professional:

 

  • Publication 587, Business Use of Your Home (PDF 214K)
  • Form 8829, Expenses for Business Use of Your Home (PDF 64K)
  • Form 8829 Instructions (PDF 29K)
  • Schedule C, Profit or Loss from Business (PDF 111K)
  • Schedule A, Itemized Deductions (PDF)

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