Guidelines for Your Home Office Deduction

When you are self-employed and work from you home office, there are certain guidelines that you must follow in order to use your home office expenses as a tax deduction. The area that you have designated as your home office must be used regularly, and primarily for your business operations. You cannot place a computer in a corner of your bedroom, use it occasionally for tasks, then try to claim expenses as a home office deduction. The IRS has become more observant of online home-based business operations in recent years, as many people have tried to take deductions that did not qualify under the IRS guidelines. Unfortunately many of these people who started home businesses relied on false information from folks who mislead them about the deductions they could claim.

The IRS has a page on its website that outlines which deductions are acceptable and which ones are not. The portion of your home that you use for your deductions can be detached from your home, such as and extra building or garage that is stationed on your property. If you happen to work for someone else as an employee, perform administrative and management duties exclusively from your office, you can then claim deductions for the office space. But you must remember that you must perform these duties only in your home office, not at your workplace.

After you have determined that you meet all of the guidelines to claim your home office as a tax deduction the following are a few of the expenses you can deduct; portions of your mortgage interest, rent, utilities, repairs, depreciation, insurance, and real estate taxes. Of course the amounts you claim will be dependent on the amount of income your claiming. The IRS provides Form 8829 to figure you home office deduction and you must report the amounts on a Schedule C form.