Determining if You Are Eligible for the Home Office Deduction

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If you work from your home regularly out of an office, you are probably wondering if you are eligible for the home office deduction. Therefore, today we are going to cover the requirements Home office and computer and chair with brown walls and TV in living room.for claiming the home office deduction so you can have a better idea as to whether or not this is something you qualify for.

A Section in Your Home is used exclusively and consistently for Work

You have to have a dedicated section in your home that is used exclusively for work. If you are an employee, you must work from home for your employer’s convenience.

For example, if you have no office space provided by your employer and you work from home regularly you may qualify for the home office deduction.

A Section of Your Home is Used Exclusively and Regularly for Meetings

Do you have clients and customers come to your home regularly for meetings? For example, are you a small business owner, doctor, or financial advisor? Keep in mind, the place where the meetings take place must be used exclusively for meetings. For example, if during non-business hours your family hangs out there, you would not qualify for the deduction.

You Have a Separate, Unattached Structure for Your Business

You can have a separate, unattached structure on your property that is used exclusively for business. For example, if you have a woodshop on your property that you use to build things for customers, you would qualify for the home office deduction.

Daycare & Storage Exceptions

If you operate a daycare or use your home to store items that are for sale you just have to do so regularly, exclusivity is not required in these two cases.

These are the basic things that you need to keep in mind when determining if you are eligible for the home office deduction.

Things You Can Deduct Under the Home Office Deduction

  • Mortgage Interest
  • Insurance
  • Real Estate Taxes
  • Rent
  • Utilities
  • Repairs
  • Depreciation

NOTE: All of the items listed above would be pro-rated to come up with the deduction amount. Many home office workers do not take the home office deduction because they feel that it is too much work and will trigger and audit. However, in our opinion it is worth the extra work because it allows you to keep more of your hard-earned money in your pocket.

Remember, when you file your taxes with H&R Block Online, you don’t need to know which schedules to fill out. We’ll ask you simple questions about your life and put your answers on all the appropriate forms.

 

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