Home Office Tax Deductions

Setting up an office in your home? Generally, in order to claim any home office tax deductions, you must use the space exclusively as your principal place of business, or as a place to meet with patients, clients, or customers. If you’re self-employed as a sole proprietor, partner, or LLC member, you may be able to deduct the costs of maintaining an office at home.

In fact, current tax law gives you several ways to qualify for a home office write-off. Assuming you’re eligible, here’s the payoff:

• You can deduct 100 percent of any expenses that are directly related to your home office, such as an additional phone line.
•  You can deduct a percentage of indirect expenses that relate to your entire residence, such as mortgage interest and property taxes.

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

The great thing about home office deductions is they go on Schedule C (if you are a sole proprietor or single-member LLC owner) or Schedule E (if you are a partner or member of a multi-member LLC). Write-offs that appear on these business schedules are double tax savers, because they reduce both your income and self-employment tax bills.

Of course, there are some restrictions on home offices, along with rules on recordkeeping requirements. And if you are an employee, different rules apply.

Contact GTM for more information at (888) 432-7972.