Can my Business deduct my Home Office?

Home Office as a business deduction?
This answer is MAYBE! But only for qualified home offices.

 

 

What is a Qualified Home Office?

• You cannot deduct a Home Office if you rent an outside office; the home must be the taxpayer's principal place of business
• There must be exclusive use of a portion of the home for conducting business on a regular basis. For example, a taxpayer who uses an extra room to run their business can take a home office deduction only for that extra room so long as it is used both regularly and exclusively in the business
• You don't need to have an entire room devoted to business use. It can be a portion of a room that can be clearly identified, for example, a 5' x 5' area with a desk in the corner of your living room can qualify as a home office if it meets all the tests.

 

Business use of Home Deduction (Home Office)

If you want to claim a % of your home as a business deduction (Home Office), you must provide 2 square footage totals - both the total home square footage and the square footage of the home office.
With these 2 totals we can determine the % of business use of your home (Home Office).

Once we have the % of business use, we can then deduct that % of your home's expenses as a business deductions i.e. rent, mortgage intereset, utilities, insurance, taxes, repairs, cleaning, etc...
The IRS has a special process for this, see Intro to Accountable Plans

 

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