Can I deduct Home office expenses?

Who Can Claim It?

W-2 employees cannot claim the home office deduction.

Who Qualifies?

Homeowners and renters can claim the home office deduction using Form 8829.

What Expenses Can Be Deducted?

Deductible expenses include mortgage interest, insurance, utilities, repairs, maintenance, depreciation, and rent.

Specific Requirements:

Taxpayers must meet specific requirements to claim home expenses as a deduction, and the deductible amount may be limited.

Definition of "Home":

"Home" includes houses, apartments, condos, mobile homes, boats, and similar properties.

It also includes structures on the property like garages, studios, barns, or greenhouses.

However, it doesn't include any part of the property used exclusively for hotels, motels, inns, or similar businesses.

Basic Qualifications:

Exclusive use of a portion of the home for regular business activities.

The home is generally the taxpayer's main place of business or where administrative activities occur with no other location available.

Separate Structures:

Expenses related to a separate structure not attached to the home may qualify if it's used exclusively and regularly for business.

Calculation Methods:

Two methods are available:

Simplified option: $5 per square foot, with a maximum size of 300 square feet and a maximum deduction of $1,500.

Regular method: Deductions based on the percentage of the home used for business activities, including both direct and indirect expenses.

In essence, if you use part of your home for work and meet certain conditions, you may be eligible for the home office deduction. There are different ways to calculate it, so we will choose the method that best fits your situation.