Home Office Deduction Criteria

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Do you use your home for business? If so, you may be able to deduct expenses for the business use of your home, such as: mortgage interest, insurance, utilities, repairs, and depreciation.

You must meet two requirements in order for your home to qualify as a deduction.

• You must use your home office space regularly and exclusively for business.
• You must run your business primarily out of your home office.

 
Keep in mind that typically home office deductions are based on the percentage of your home that is devoted to the business. If you use a spare room as your office, you’ll need to calculate the percentage of your home you have devoted to business activities.

If you telecommute and want to deduct your home office workspace, you must meet the follow criteria:

• The use of your home workspace must be for the convenience of your employer.
• You can’t rent any part of your home to your employer and use the rented portion to perform services for that employer as their employee.

 
Daycare providers have special qualifications for deducting their workspace. You may be allowed to deduct business expenses for parts of your home, even if you use them for non-business purposes.

• You must be providing daycare for children, people age 65 or older, or for people who are physically or mentally unable to care for themselves.
• You must have applied for, been granted, or be exempt from having one of the following: a license, certification, registration, or approval as a daycare center, family daycare home, or group daycare home.

 

To learn more about deducting your home business workspace, contact H&S Companies.

Sources:
Home Office Deduction
Publication 587, Business Use of Your Home