Whether you are self-employed or an employee, if you use a portion of your home for business, you may be able to take a home office deduction.  Here are some things to know about the Home Office deduction so you can account for these related expenses properly during the year to take the deduction on your next year’s return:

1. Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly:

• as your principal place of business, or
• as a place to meet or deal with patients, clients or customers in the normal course of your business, or
• in any connection with your trade or business where the business portion of your home is a separate structure not attached to your home.

2. For certain storage use, rental use, or daycare-facility use, you are required to use the property regularly but not exclusively.

3. Generally, the amount you can deduct depends on the percentage of your home used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.

4. There are special rules for qualified daycare providers and for persons storing business inventory or product samples.

5. If you are self-employed, use IRS Form 8829, Expenses for Business Use of Your Home, to figure your home office deduction and report those deductions on line 30 of Form 1040 Schedule C, Profit or Loss From Business. Use the Instructions to IRS Form 8829 to help you complete the form.

6. If you are an employee, additional rules apply for claiming the home office deduction. For example, the regular and exclusive business use must be for the convenience of your employer.

For more information, contact Hertsel Shadian, Attorney at Law, LLC at (503) 352-6985, or see IRS Publication 587, Business Use of Your Home, available at www.IRS.gov or by calling 800-TAX-FORM (800-829-3676). Please also share this article with others you know that might benefit from this information.

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