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Is there a home office deduction if I work from home 3 days a week?
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- Benjamin Anderson
My accountant told me years ago that if you want to make this question as easy to address as possible, you need to start with a room with a door that locks and that uses a different key from the one that works on your house. That eliminates all question of what that office space is really for -- unless you put a guest bed or something similar in it. My advice is to follow the link Kate provided, then have a long heart-to-heart with your accountant, or a counselor at a resource like SCORE, the Service Core of Retired Executives (at www.score.org online). Good luck -- and be careful!
Thank you for the information Kate and Michael. The links that you provided are very helpful. I will make sure to be careful when deciding what to write off and what not too.
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There are strict rules about what you can and cannot deduct as home office expenses as an independent contractor. These rules are even stricter if you are not self-employed.
If you use your home office "for the convenience of your employer" -- for instance, you work as a call-center employee out of your own home -- you can deduct home-office expenses. If the use of the home office is merely "appropriate and helpful," according to the IRS, you cannot deduct expenses for the business use of your home. So, if you have a long commute and decide that it's easier to spend some of your week working at home, you're out of luck.
Also, there are strict rules governing whether you can deduct home office expenses and when you can deduct them. For instance, to deduct part of your rent/mortgage as a home office, you must use that space only for work. You cannot deduct your den if you watch TV in there and also use your desk that's in it for work.
The IRS is very strict about rules governing business deductions, and they are quick to audit home office expenses because deductions are so often abused.
Check out IRS Publication 587 for specifics: http://www.irs.gov/publications/p587/ar02.html#en_US_publink1000226300