If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The IRS has the following six requirements to help you determine if you qualify for 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 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 www.IRS.gov or by calling 800-TAX-FORM (800-829-3676).Links:
- Publication 587, Business Use of Your Home
- Instructions: Form 8829, Expenses for Business Use of Your Home
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