5 Tips on Understanding Home-Office Deductions

  • Take advantage of every legal opportunity to reduce your taxes. Recent changes in the law benefit business owners who use their homes as an administrative and management base but work at other locations.
  • Ask your tax professional to analyze your business regularly so you don't miss important deductions.
  • Document deductible items. These usually include such costs as computers and other equipment, telephone charges, furnishings, and prorated portions of rent, utilities and home insurance. You may not deduct expenses for lawn care or those related to rooms not used for business.
  • If you are a homeowner, discuss with your tax advisor whether or not to take a depreciation deduction for the office space.
  • For detailed information, go to the Internal Revenue Service website, and download IRS Publication 587, Business Use of Your Home.