This year I started a sideline business at home. What kind of guidelines should I use in order to deduct the costs of my home office, computer, telephone, etc.?
>>>>>>IR$Maven’s reply:Since the principal place of business is your home, you can deduct on your tax return both direct and indirect costs incurred at the home office. Examples of direct costs are travel, entertainment, telephone (business portion), cellular phone, office supplies, postage, stationery, office furniture, fixtures and equipment (subject to annual limits) and any other direct “out of pocket” costs. Examples of indirect costs are homeowners insurance, utilities (gas & electric), home repairs, cleaning & maintenance and a portion of your rent, or a portion of your mortgage interest & real estate taxes if you own the residence (Note: mortgage interest & real estate taxes would be deductible on Schedule A, Form 1040 even if you have no home office). For tax years 1998 and prior, in order to deduct indirect expenses, you had to perform the most important aspects of your job (in your case, the side line job) at the home office. For example, a surgeon who performs all operation
