Thursday, March 15, 2007

Tax Tip: Deduct your home office

Do you work from home? You might be able to deduct home office costs on your tax return, if you are self employed, and in some cases, even if you are an employee. As long as you meet the requirements, lists out how you can claim home office expenses as deductions on your tax return.

A home-office deduction is generally easier for self-employed individuals to claim. But even then, the Internal Revenue Service has certain requirements a taxpayer must meet.

General requirements
First, your home-office area must be used regularly and exclusively for your business needs. You can't set up a computer in your den, sporadically type invoices and claim that room as your home office.

Secondly, the business part of your home must be either your principal place of business or where you meet or deal with patients, clients or customers in the normal course of your business. A separate, detached structure such as a garage or guesthouse that is used for business also may qualify as a home office.

More here.

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