Home Office Deductions
Home Office Deductions in General
Special Requirements for Employees
Actual Expenses or Safe Harbor Amount
Special Business Uses of a Home
Today over 40 million Americans work at home at least some of the time, and the number is growing. Computers, faxes, modems, and the information highway make it easier and, in some cases, more profitable to operate a home office. The U.S. Small Business Administration reported that 52% of all small businesses are home-based and that they generate $102 billion in annual revenue; the average return on gross revenues for these businesses is 36%, compared with just 21% for non-home-based businesses.
As a general rule, the cost of owning or renting your home is a personal one and, except for certain specific expenses (such as mortgage interest, real estate taxes, and casualty losses), you cannot deduct personal expenses. However, if you use a portion of your home for business, you may be able to deduct a number of expenses, including rent or depreciation, mortgage and real estate taxes, maintenance, and utilities.
The SBA says the average home office deduction is $3,686. The IRS has never reported on the amount of the average home office deduction.
The deduction may take the form of ...
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