Tuesday, January 22, 2008

Tax Tip: Home Offices Are Worth The Deductions If You Qualify [Taxes]



 
 

Sent to you by David via Google Reader:

 
 

via Consumerist by Meg Marco on 1/21/08

notquite.jpgA home office can be a significant deduction and well worth it if you qualify—but don't try to bend the rules. Either you qualify or you don't. Wise Bread has a good post about home office deductions, including who qualifies for a home office deduction and also what expenses are deductible.


The first question that must be asked about any home office in order for it's expenses to be deductible is, is the workspace used exclusively and regularly for business? The answer to both of these questions must be yes before any deduction can be taken. If the workspace is used for both business and personal use, then it is not deductible. Furthermore, the space must be used on a regular basis for business purposes; a space that is used only a few times a year will not be considered a home office by the IRS, even if the space is not used for anything else. These criteria will effectively disqualify many filers who try to claim this deduction but are unable to substantiate regular and exclusive home office use. It should be noted that it is not necessary to partition off the workspace in order to deduct it (although this may be helpful in the event you are audited.) A simple desk in the corner of a room can qualify as a workspace, provided you count only a reasonable amount of space around the desk when computing square footage.

Deduct Those Home Office Expenses [Wise Bread]
(Photo:Tengaport)



 
 

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