How to Qualify For a Home Office Deduction

Since Congress began liberalizing home office rules in 1999, many home-based businesses can now legally claim tax deductions. If you do the math with your accountant, you will find that the deductions can add up to thousands of dollars every year. 오피

However, to qualify for the deduction, you must meet several requirements, including:

(a) That you use your home your principal place of work or principal office,

(b) That you use your home for business on a regular basis, and

(c) That there’s a space in your home that is used exclusively for business.

For the principal office requirement, this provision has been so liberalized that practically most home businesses, including network marketing businesses, can qualify. Simply said, you only need to manage your business from home (including the paper work), and NOT have another office from where you manage your business (drop off points do not qualify as office).

Regular use means you work at least 45 minutes a day, four to five days every week at home. So, if you only work one hour every week, you may not qualify for home office.

Exclusive use does not mean you have to have an entire room dedicated to office work. In fact, a portion of your room will do. But that portion must be used exclusively for business-related transactions. So, if you have a desk at home, do not play games on the computer. And take out any unrelated reading materials from the bookshelf. Take note that the IRS can visit your home to check if you are not playing games in the space that you designate as your home office.

What deductions are allowable in a home office? Home office deductions pertain to real estate, not the furniture. Thus you can deduct part of the utility bills, depreciate your home, etc.