Home Office Deduction Quick Tips You Need To Know

Let’s face it, as a business owner tax deductions quickly become your best friend. 

Whether it’s insurance costs, expenses for utilities and maintenance, or even monthly rent, every dollar saved makes a difference. 

Luckily, if your business is based out of your home, there is a 2019 standard deduction that you may be eligible to claim to deduct certain home expenses on your tax return. 

Use these home office deduction quick tips to take advantage of extra savings on your annual tax filings. 


Home Office Deduction Quick Tips You Need To Know 

Who can take a Home Office Deduction?

Home office deductions are available to homeowners and renters. 

What expenses can taxpayers deduct?

  • Mortgage Interest
  • Insurance
  • Utilities
  • Repairs
  • Maintenance
  • Depreciation
  • Rent

What does the IRS consider to be a “home”? 

A “home” according to the IRS includes a house, apartment, condominium, mobile home, boat or similar property. 

Structures on the property, such as an unattached garage or studio, can also be considered a part of the home. 

Note: A taxpayer’s property that is exclusively used as a hotel, motel, inn or similar business is NOT eligible to be considered as part of the home office deduction. 

What do I need to meet the requirements for a Home Office Deduction?

You must meet the following requirements to claim home expenses as a deduction when filing your taxes: 

  1. A portion of the home must be used exclusively for conducting business on a regular basis. 
  2. The home used for tax deductions must be the taxpayer’s principal place of business. Administrative and/or management activities conducted at the home due to no other location being used to perform these duties, qualifies the home to be used for tax deductions. 

Expenses related to separate structures not attached to your home will qualify for a home office deduction if it used exclusively and regularly for business. 

What methods can be used to calculate my Home Office Deduction?

  • Simplified Option – Use a rate of $5 per square foot for the business use of the home. 300 square feet is the maximum size for this option, resulting in the maximum deduction of $1,500.
  • Regular Method – Deductions using this method are based on the percentage of the home which is devoted to the use of your business. The regular method deducts direct expenses in full. 


Keep a Detailed Record of Expenses

Now that you have these quick tips for taking advantage of a home office deduction, be sure to keep a record of your expenses to accurately file your taxes with the help of TaxBandits

Whether it is a 1099/W-2 Form for your employees or an extension of time to take care of your annual tax filing requirements, TaxBandits helps you take your time back so you can focus on what matters most–growing your business!


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