The IRS reports that less than 50% of the small business owners who are eligible to take an office in the home deduction due so because of either the perception that it will cause an audit or because the rules are so complex.

In the next few tax tips, I will discuss that deduction.

Generally, in order to claim the office in the home deduction, you must use a part of your home regularly and exclusively as:
(1) your principal place of business
(2) a place to meet and/or deal with patients, clients or customers in the normal course of your business, or
(3) if it is a separate structure on your property and is not attached to your home, the structure must be used in connection with your business or trade

If you are using storage space in your home or you have a daycare facility, the use must be regular but does not have to be exclusive.

 
This information is provided in an effort to help you gather and organize the information necessary to file your individual or small business income tax return. While these financial tools are not a substitute for financial advice from a qualified professional, they can be used as a starting point in your decision making process.