If you work from home, you may be able to deduct certain expenses related to your home office on your tax return. However, it’s important to follow the specific rules set by the IRS when qualifying your home office as a business expense. Here are the three general rules you need to keep in mind:
Specific Area of Your Home: To qualify for the home office deduction, you must use a specific area of your home exclusively for business purposes. This means that your home office cannot double as a guest room or be used for personal activities like watching TV or playing games.
Regularly and Exclusively: You must use the designated space of your home for business purposes on a regular basis. Occasional or incidental use doesn’t satisfy the IRS requirements. Additionally, this area of the home should be the principal place of your business; this is where most business activities are conducted.
Meeting Clients, Patients & Customers: Lastly, you need to use the specific area of your home for meeting with clients, customers, or patients in the normal course of your business. This means that your home office must be the primary place where you conduct business and meet with clients, rather than a secondary location.
By following these general rules, you can ensure that your home office qualifies as a legitimate business expense, allowing you to lower your tax bill and maximize your available deductions.