How do I claim business use of my home?
To claim business use of your home, you must use your home regularly and exclusively for business purposes. The IRS allows deductions for a portion of your home expenses if the space is used for business activities.
Eligibility Requirements
- The space must be used regularly and exclusively for business.
- It must be your principal place of business or a place where you meet clients or customers.
- For daycare providers, the space must be used for daycare services.
How to Claim the Deduction
You must complete Form 8829, Business Use of Your Home, to calculate the deduction. This form helps you determine the percentage of your home used for business and the allowable deductions for expenses such as:
- Utilities
- Repairs and maintenance
- Property taxes
- Homeowners insurance
- Depreciation (if applicable)
The deduction is based on the percentage of your home used for business. For example, if 20% of your home is used for business, you can deduct 20% of eligible expenses.
Important Considerations
- You cannot deduct expenses related to personal use of the home.
- If you are self-employed, you may also need to consider self-employment tax implications.
- Keep detailed records and receipts to support your deduction claims.
Source:
Publication 587, Business Use of Your Home (Including Use by Daycare Providers)
Publication 529, Business Expenses
Publication 946, How to Depreciate Property
Disclaimer: Always verify details with official IRS forms and instructions or consult with a tax professional. OLT (Online Taxes) provides guidance based on available IRS resources but does not offer legal or tax advice.