Home Office Tax Deduction

Whether you are self-employed or an employee, if you use a portion of your home for business, you may be able to take a home office deduction. Here are six things the IRS wants you to know about the Home Office deduction

1. Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly:

as your principal place of business, or

as a place to meet or deal with patients, clients or customers in the normal course of your business, or

in any connection with your trade or business where the business portion of your home is a separate structure not attached to your home.
2. For certain storage use, rental use, or daycare-facility use, you are required to use the property regularly but not exclusively.

3. Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.

4. There are special rules for qualified daycare providers and for persons storing business inventory or product samples.

5. If you are self-employed, use Form 8829, Expenses for Business Use of Your Home to figure your home office deduction and report those deductions on line 30 of Form 1040 Schedule C, Profit or Loss From Business.

6. If you are an employee, additional rules apply for claiming the home office deduction. For example, the regular and exclusive business use must be for the convenience of your employer.


For more information see IRS Publication 587, Business Use of Your Home, available at LINK or by calling 800-TAX-FORM (800-829-3676).

People that post here on a regular basis know I'm not that smart.

I've done this a couple of times, but only when I had 1099 income to support it. It really worked out nicely. Is this "work" you speak of contract work? Self Employed? Or are you just a full time employee that can telecommute? If full time, I would stay away from it

Thanks. I am full time that telecomutes. Looks like I am going to just say no. Not worth an audit.

IRS has 3 years to audit you, you aren't all clear yet

Hell yes, the OP should claim a deduction for home office expenses. Being on call occasionally is sufficient to satisfy the condition of being for the employer's convenience if the work performed can be done from that location. And since the OP works at home regularly it is safe to assume he can perform the required tasks from his home.

The IRS has limited resources for auditing tax returns. Do you really think they are going to devote significant resources to auditing tax returns claiming deductions for home office expenses that might total $2,000 and then they are deductible to the extent they exceed 2% of adjusted gross income? If a taxpayer has $50,000 of AGI that is a $1,000 deduction, and likely a $150 tax benefit. The IRS has bigger fish to fry.

If you own your home, make sure you know what you may be getting into if you plan on selling your home. I think you have to depreciate that part of your home, then pay capital gains on that portion of the sale of your home (may not be 100% accurate, consult your tax professional).