Comments on: The Home Office Tax Deduction

By: nickel

nickel — Wed, 24 May 2006 18:28:12 +0000

FMF: I have a followup post that will describe this, but the ‘exclusive and dedicated’ space doesn’t have to refer to a room in its entirety (see also comment #2, above). If you use a portion of a room in the appropriate manner, you can still do the home office deduction. The smaller the area, the less valuable the deduction, but apparentely it can be done.

By: FMF

FMF — Wed, 24 May 2006 17:15:21 +0000

The “exclusive” part is the one that disqualifies me. I use part of a room in the basement for my home office, but it’s also our playroom, TV room, and whatever the kids want to make it.

By: Daytonscott

Daytonscott — Wed, 24 May 2006 16:02:59 +0000

Another key is “dedicated,” as GrowUpRich pointed out. If you use the space for anything else, it can limit your deduction. Say you have a TV in the corner for the kids’ video games–then you can’t deduct entire space. Even a couch in the office that you nap on some Sunday afternoons might get it disqualified as an office space, since you are using it for something else part of the time.

Unless it’s truly dedicated space, it’s tough to come up with accurate figures that are worth the effort for the deduction.

By: GrowUpRich

GrowUpRich — Wed, 24 May 2006 15:32:21 +0000

Something you might not have caught in your research is that you can also use partial “home office” deductions against “home office income”.

For example, you may only have a very small home office deduction based on your situation, but you could deduct real expenses against any income earned from that home office (your blog work).

Also, it doesn’t need to be an entire room, it could be as simple as having a “dedicated” table or desk where you do the work.

Feel free to contact me if you’d like some more info. There’s definitely some upside where you could save yourself some $.

By: mapgirl

mapgirl — Wed, 24 May 2006 13:02:08 +0000

I remember working with a client to measure the size of his home office. We had tape measures and crawled all over the place to figure the percentage. This is one of those times where consulting a tax professional is probably best, especially if you are going to fill out a Schedule C. You can deduct a portion of your broadband/phone service, trips you take in the car to meet clients, meals you take to meet/entertain clients, etc. Heck if you donate to PFBlogs.org to get a star, that’s probably considered a professional organization membership fee and is deductible.