There are two ways that your home office expenses can qualify for tax deductions:
In order for your home office to qualify as your principal place of business, you must spend most of your working hours in your home office and the majority of your taxable business income must be generated from activities conducted there.
There are several types of expenses at your home office which are classified as tax deductible:
However, it is more complicated than just simple deductions for all of these expenses. You must use the following methods to determine your allowable total for tax deduction:
You may not take tax deductions that exceed the total amount of the net income gained from your home office use after the mortgage interest, real estate taxes, and any casualty or theft losses are taken away. If you have no income to claim, any tax deductions may be carried forward to the next taxable year.
Tax law is a very complicated and frustrating subject. To make matters worse, tax law changes every year. Contact an attorney if you need help understanding current tax law and how it affects your home office expense deductions. If you have questions regarding the deductibility of your expenses, or you need to go to tax court, an attorney can represent you and help minimize your income tax bill.
Last Modified: 10-09-2014 01:30 PM PDTLaw Library Disclaimer
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