Chapter 9
The Business Use of Your Home
IN THIS CHAPTER
Understanding the new rules for home office deductions
Looking at allowable deductions for using your home for your business
Realizing the downsides to home office deductions
Everybody who runs a small business needs a place to work. Even if your business is a laptop computer and your office is wherever you choose to locate your posterior, you should think through the decisions of where to work and how much space you need. In Chapter 4, I discuss these “real estate” decisions for your small business.
In this chapter, I explain how the home office deduction tax rules work, including the recent and simplified home office deduction. I detail what deductions you may and may not take for using your home for your business. I also discuss the downsides to home office deductions, including audit risks and issues that crop up when you go to sell your home.
The New, Simplified Home Office Deduction
To claim expenses for the business use of your home — or the so-called home office deduction — you have to complete a fairly complicated form: Form 8829, “Expenses for Business Use of Your Home,” to be exact. Form 8829 weighs in at 43 lines ...
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