Home Office Deduction

The IRS provides tax tips via YouTube videos. The tax tips concerning home office deduction can be viewed here.

Here is a summary of the home office deduction that self-employed and employees who use a portion of their homes for business purposes may be able to take.

• Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly as your place of business, or as a place to meet with customers or in any connection with your trade or business where the business portion of your house is a separate structure not attached to your home.
  


• For storage use, rental use, or daycare-facility use, you are required to use the property regularly but not exclusively.
  
  
  
• The amount you can deduct depends on the percentage of your home used for business. Your deduction will be limited if your gross income from your business is less than your total business expenses.
  
  
  
• Special rules apply to qualified daycare providers and for people storing business inventory or product samples.
  
  
  
• Form 8829, Expenses for Business Use of Your Home is used by self-employed people to figure the home office deduction. That deduction is then reported on Schedule C, Profit or Loss From Business.
  
  
  
• Additional rules apply to an employee such as the regular and exclusive business use of the home must be for the convenience of the employer.
  

Additional information can be found in IRS Publication 587, Business Use of Your Home.