Home-Based Business Tax Deductions

Posted by Ktasha N. Hardge, your personal tax partner | Posted in , , , | Posted on 10:37 PM

One of the benefits enjoyed by many home-based businesses are the potential tax deductions you can claim for your home office. Certain tests need to be met and there are several things to be considered before you claim these deductions.

Two of the main qualifications are:
  1. You must use an exclusive area in your home regularly and exclusively for business purposes.
  2. The exclusive area used for business must be your principal place of business or the location where you meet with your clients during the normal course of conducting business. You may also be able to claim deductions if you use an area of your home for storage purposes or housing inventory and/or product samples.
If you meet the IRS' requirements for claiming the Home Office deduction on your tax return, you may be able to deduct a percentage of:
  • Property Taxes paid on your home
  • Mortgage Interest
  • Rent Payments if you are not a home owner
  • Utilities
  • Homeowners or Renter's Insurance
  • Depreciation on your home (if you own it)
  • Painting, repairs and more.
For more info, check out:
IRS Tax Topic 509 - Business Use of Your Home
Can You Take a Home Office Deduction
Publication 587 - Business Use of Your Home

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