How-To Expense Your Home Office

If you're working primarily in your home then you qualify for home office deductions which will lower your taxable income. It's important to document any deductions that you take.


First, calculate the percentage of your home that is used exclusively and regularly as an office. That percentage is then applied to the total annual expense amount in each category below. The calculated amount can be deducted as a business expense. Note that home office deductions cannot take your business Net Income to a loss.


Below are expenses that can contribute to your home office deduction:

· Utility Expenses (electric, water, gas, etc.)

· Rent/Mortgage Interest and Property Taxes

· Casualty losses

· Repairs/Maintenance

· Any expenses that were incurred to setup/build out the home office are 100% deductible

· Telephone Expenses

· Homeowners insurance

· Depreciation

· HOA Fees

· Security


Let's look at an example:

Say that 30% of your home is used exclusively and regularly as an office. Your electric bill is $6,000 for the year. $1,800 of electric expenses can be deducted as a business expense.


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