IRS Home Office Tax Deduction

People are often concerned about taking a deduction for a home office

What you can deduct and can't deduct  is the question.

So here is the scoop:
Your "office has" to be a space used for business only. It can be a part of a room or a whole room. If you determine how many square feet of space you use for an office, and divide that into the square feet of your house, you have the percentage deductible expense. You can't share the desk etc. with the kids doing homework or the spouse storing recipes or for hobby interests.

 People are often moving their job or business into their homes.
With internet businesses and e-bay marketers etc. it gets confusing who is a legit business or just a casual seller. There are people doing online business such as medical transcriptionists or text editing, computer work such as software design, CAD etc. or selling crafts on the web.
Many people have become legit businesses or work for their employer from their home office.

You can take deductions for supplies and not deduct the home office if your home office is too confusing to figure out.
 Check the IRS for deducting Office furniture. You can choose to defunct it in one year (section 179 deduction) or depreciation deduction over a period of 7 years.

The IRS says:

If you use a portion of your home for business purposes, you may be able to take a home office deduction whether you are self-employed or an employee. Expenses that you may be able to deduct for business use of the home may include the business portion of real estate taxes, mortgage interest, rent, utilities, insurance, depreciation, painting and repairs.

You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively:

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

If you use a separate structure not attached to your home for an exclusive and regular part of your business, you can deduct expenses related to it.

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

If you are self-employed, use Form 8829 to figure your home office deduction and report those deductions on line 30 of Schedule C, Form 1040.

If you are an employee, you have additional requirements to meet. 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 or by calling 800-TAX-FORM (800-829-3676).

Remember that for the genuine IRS Web site be sure to use .gov. Don't be confused by internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is

So uncle Sam has the last word on that subject. Do more research on the IRS websites and you will feel more secure in taking deductions.

After all, there is no need to feel shy about knowing what you can save in tax expense.

You can be sure that the IRS won't go out of their way to help you to take all of the deductions you are entitled to.

Knowing how to get the tax breaks you deserve is an important part of small and big business survival.

Bold text above is from the IRS.

Extra text is Copyright © Roger Chartier 2008
Go to the Tax Page for many more tax saving tips pages.

The Author - Roger Chartier