Does Your Home Office Meet IRS Standards?

Does your home office meet the IRS home office deduction standards?
Meet these three tests and gain valuable deductions for your home based business:

  1. Exclusive use – a separate and identifiable space in your home that is only used for business purpose and no personal activities ever take place in that space.
  2. Regular use – Use it on regular basis to perform administrative or management activities, use it as a place to meet or deal with clients in the normal course of business.
  3. Principal place of business – no other fixed location is available to conduct administrative or management activities

At tax time if you qualify for the home office deduction you will need the following information:

  • The total space of your home and the total space used for business purposes exclusively.
  • You will need to determine which expenses are direct versus indirectly related to your business.  Expenses that can deduct:
    • Mortgage and property tax or your rent
    • Utilities that are imperative to your business operation
    • Insurance and general repairs (not repairs that affect only non-business use of home areas, such as painting the kitchen or lawn care.