Home offices can be written off if you qualify…

If you use a portion of your home for business purposes, you may be able to take a home office deduction no matter whether you are self-employed or an employee.

To qualify for a home-office deduction, you must use an area of your home regularly and exclusively for business purposes, and you must meet the following conditions:

You use…

1. The space as your principal place of business for any trade or business, and the business generates revenue.
2. The place to meet or deal with your patients, clients or customers in the normal course of your trade or business.
3. The area exclusively to store inventory or product samples for your business.
4. The space exclusively for your business and not part of the time for personal use with one exception.

• SPECIAL RULE FOR Home Based Child or Adult care.
• If the space is used for Home Based Child or Adult care you are allowed to share the space with your normal living routine.
• Home Based Child or Adult care businesses are allowed to use a “Time-Space” calculation to determine the business use of the home.
• This special rule ONLY applies to Home Based Child or Adult care businesses!

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.

To claim the home-office deduction, you must complete and file IRS Form 8829 with your tax return and base your deductions on the ratio of the square footage used for business versus the total square footage in your house.

For example, if you use a 8-by-25-foot room for business and have a 2,000 square-foot house, you're allowed to claim 10% of your qualifying expenses as home-office deductions.

See IRS Publication 587, Business Use of Your Home for additional information. www.irs.gov