Home Office Tax Deductions

Keeping your office at home has many benefits. Aside from the ease of rolling from bedroom to office without ever having to step outside, there are lots of tax benefits that result from working at home.

Because different locations have their own rules about types of businesses that can be run from a residence, as well as directives about office size and other rules, it's impossible to include a comprehensive list of tax benefits that applies to everyone.

That said there are some federal guidelines that generally apply to all home businesses.

The Space

You can claim a percentage of your mortgage and utilities equal to the percentage of your house that is being used by the business.

For example, if the square footage of your home office is 10% of the total space of your home, then you can include 10% of your mortgage and utilities as a deduction.

Improvements

Improvements made to the home office are 100% deductible.

Improvements made to the rest of the house which have an impact on the office - such as central air - are deductible under the same percentage rules as the mortgage.

Furnishings

Items purchased to furnish your home office are deductible. Items purchased for the rest of the house are not.

Keep in mind that to qualify for these deductions, you must have a dedicated home office that is used ONLY for that purpose. Also, you must not have another office space that you work from.

The examples of tax deductions listed here are by no means exhaustive. There are many others that can help you save thousands of dollars on your taxes.

Of course, you will want to check with your tax professional to be sure you are taking advantage of all possible tax benefits.