What details as a home office?
28% of working individuals use an area in their residence that they would call a home office. It makes sense, right? You buy a desk. You have your own computer. You work at said desk and said computer. You might even be using your couch as a home office; who needs a chair? Sadly, these likely will not qualify as “home office” for tax deductions.
A home office must meet 2 criteria for tax deductions:
- You must use the space regularly and only for business purposes. Family rooms and guest bedrooms aren't tax deductible, even if you spend 40 hours a week doing work in them!
- The space must be the principal place of business. If you have a business location and office outside of your home, you may still qualify. You can claim certain deductions, for instance, if you see patients or clients, and have documentation proving as such. At the same time, if you use your separate garage or barn, for instance, as your main place of business, you don’t need to see customers or patients on a regular basis... as long as you use the area exclusively and regularly for business.
If you’re an employee for a company who works from home you may also qualify for a deduction. This is only if you work at home for the convenience of the employer and you don't rent that space to your employer.
If you qualify for a home deduction it’s generally calculated by what percentage of the home is being used as an office.
Eric Stewart discusses all this and more on the Eric Stewart Show on WMAL! To listen to prior episodes, click here. Subscribe to our blog on the right, and be the FIRST in your area to find out what homes are coming soon on the market here!
Are you currently reading this in a government approved home office?
Remember to always check with a licensed tax professional! Leave a comment - let’s discuss!
This information was gathered off of the IRS website, from Eric Stewart, and Abby Eisenkraft’s great, informative book, 101 Ways to Stay Off the IRS Radar, which can be purchased easily on Amazon and is currently FREE for Kindle Unlimited customers!