One of the best and often overlooked tax deductions is the home office deduction. While this won’t reduce your IRS payment to zero, it can still provide a lot of added value, especially for those working from home or running a business out of their spare bedroom. Just make sure to use it correctly.
Here are a few tips to keep in mind:
1. Make sure your office space is exclusive
Generally, this means that you cannot use this space for anything else. For example, if you happen to do work in your dining room but also eat dinner here every night, it would not qualify. This space needs to be used for business activities and nothing else.
2. The space claimed must be your primary place of business
Now, this doesn’t mean that it’s the only place of business, it just means that it’s the principal place of business — it’s where majority of your work is done, but again, not necessarily all your work.
3. Don’t fear the IRS
While many myths claim that home offices are an IRS audit flag, that is not the case. In today’s day and age, almost half of Americans have home offices. If you are entitled to take the deduction, then you should take it.
There are some issues , however, that must be considered before you take that deduction so please be sure to call the office if we can help you sort this out.
Tags: home office
Written by: Doug Rodrigues