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Using home as your new office? Check if you can take tax deduction for home office…

Under IRS publication 587, you can deduct items related to your residence as a legitimate tax expense. These items include mortgage interest, real estate taxes, utilities, maintenance, rent, depreciation, or property insurance. However, to qualify as a deductible expense, one must use part of ones home:

1. Exclusively and regularly as your principal place of business (see Principal Place of Business, later);

2. Exclusively and regularly as a place where you meet or deal with patients, clients, or customers in the normal course of your trade or business;

3. In the case of a separate structure which is not attached to your home, in connection with your trade or business;

4. On a regular basis for certain storage use (see Storage of inventory or product samples, later); For rental use (see Pub. 527); or

5. As a daycare facility (see Daycare Facility, later).


The following flowchart can help determine if you can deduct business use of the home expense:


Disclaimer: The above write-up is not an advice. Your particular tax situation will derive the specific tax strategy. Please consult us for your specific scenarios and we will be happy to talk you through your taxes and accounting matters.

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