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The Home Office Tax Deduction
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How to Claim the Home Office Deduction
If you qualify for the home office deduction, you must figure the amount of your deduction on IRS Form 8829, Expenses for Business Use of Your Home. (You can find this and other tax forms at the IRS website, www.irs.gov.) Then you enter the total amount of the deduction on Schedule C, Profit or Loss from Business. Attach both Form 8829 and Schedule C to your Form 1040 tax return.
Be ready to prove to the IRS that you are entitled to take the home office deduction. Here are some steps you can take to help establish your legal right to deduct home office expenses:
- Photograph your home office and draw a diagram showing the location of the office in your home. Keep this information in your tax folder.
- Have your business mail sent to your home.
- Use your home address on your business cards and stationery and in all business ads.
- Get a separate phone line for the business.
- Have clients or customers visit your home office -- and keep a log of those visits.
- Keep track of the time you spend working at home.
For more information on the home office deduction as well as many other deductions for small business owners should take, see Home Business Tax Deductions: Keep What You Earn, by attorney Stephen Fishman (Nolo).
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