Tax Tip of the Week: Home office tax deduction

We live in an age now where entrepreneurship is very common for most people. Luckily, if you run your whole business, or part of it, out of your home, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and renters, and applies to all types of homes. There are just two requirements for your home to qualify for a deduction:
• Regular and Exclusive use: you must regularly use part of your home exclusively for conducting business, like a spare room serving as your office or workspace.
• Principal place of your business: You must show that you use your home as your principal place of business. If you conduct businesses at a location outside of your home, but also use your home substantially and regularly to conduct business, you may qualify for a home office deduction. For example, if you have in-person meetings with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business. You can deduct expenses for a separate free-standing structure, such as a studio, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or the only place where you meet patients, clients, or customers. Generally, deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.

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