Claiming Deductions for a Home Office
The tax law allows qualified taxpayers to deduct a home office. However, because the IRS perceives that taxpayers either misuse or abuse this deduction, the IRS puts these taxpayers at a higher risk for audit. The tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. can provide you with guidance in balancing the benefit of the home-office deduction and risk of such deduction being denied by the IRS in an audit.
An IRS audit usually involves many complex tax law issues besides entitlement to and amount of a home-office deduction which we see on a regular basis. With that in mind, here are a few tips to keep in mind if you are looking to claim a home office:
Dedicated Space: Any space in your home that you claim to be your home office needs to be exclusively dedicated to work use. This means that if you have a room in your home that solely functions as your work office, you can claim it. But you can’t claim your kitchen table.
Regular Use: You also need to regularly use your home office space for work in order to claim a deduction. This doesn’t mean that you have to be there working from 9 to 5 every day, but it does mean that you need to work from home frequently.
Indirect Deductions: You can claim 100 percent of your deductions for direct work expenses like your computer, printer or upkeep on your work space. You can also claim a partial deduction for home-related items such as mortgage payments and utility bills. This is prorated based on the size of your home office.