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Is Your Home Office a Tax Deduction?

Many individuals have home offices, but are unclear on whether or not they can claim these home offices as tax deductions. The IRS explicitly states that home offices can be deducted from your taxes. However, they are also very clear that this home office can only be used for work-related purposes. It must also be used regularly for work-related purposes (meaning it cannot be a spare room that you happen to do some work in now and then).

Is your home office suitable for an IRS deduction?

If so, then it is worth exploring how to claim the home office on your taxes. Self-employed individuals can do this when they file their tax return. If you are an employee of a business it is necessary in case of an audit to be able to prove that your home office is for the sole benefit of your employer.

Necessary Information When Claiming Home Office Deduction

There are a few necessary steps when claiming your home office. These steps include:

  • Providing the area of the room that is used exclusively for business.
  • Providing the total area of your home.
  • Calculating the percentage of your home which your home office takes up.

You will also need to have on hand your mortgage payment, household expenses, and other similar expenses.

Use Caution When Claiming a Home Office Deduction

You should absolutely claim any eligible home office deductions. Doing so can significantly lower your tax liabilities. Be sure to keep all receipts and other relevant information on hand just in case.

Call us with any questions about claiming your home office as a tax deduction. We’ll be happy to take a look at your situation and see what we can do save you more money.