Home Offices – What Are the Requirements?
With the increasing use of computers, modems, and job sharing, more and more people work from their homes. Whether you are self-employed or work for someone else, the home office can give extra deductions on your tax return, but can create extra headaches when you sell your home. The Internal Revenue Code allows taxpayers to claim a deduction for expenses incurred in operating a business from their home if they meet certain requirements. This home office must be used regularly and exclusively 1) as the principle place of business for a trade or business; 2) as a place to meet with patients, clients, or customers in the course of the trade or business; or 3) in connection with the taxpayer’s trade or business if the location is in a separate structure not attached to the dwelling unit. The “regular and exclusive” requirement does not have to be met if you are operating a day care business in your home. In addition, if you are an employee, the business use of your home must be required b
