Income & Expenses
Question: I use my home for business. Can I deduct the expenses?
To deduct expenses related to the part of your home used for business, you must meet specific requirements. Even then, your deduction may be limited.
Your use of part of your home for business must be:
- Exclusively and regularly as your principal place of business,
- Exclusively and regularly as a place where you meet or deal with patients, clients, or customers in the normal course of your trade or business,
- In the case of a separate structure which is not attached to your home, exclusively and regularly in connection with your trade or business,
- On a regular basis for certain storage use,
- For rental use, or
- As a daycare facility
Note: You do not have to meet the exclusive use test if you satisfy the rules that apply in either of the following circumstances:
- You use part of your home on a regular basis for the storage of inventory or product samples held for use in your trade or business of selling products, but only if your home is the sole fixed location of the trade or business.
- You regularly use part of your home as a qualifying day-care facility.
Schedule C (Form 1040) (PDF) filers calculate the business-use-of-home expenses and deduction limitations on Form 8829 (PDF), Expenses for Business Use of Your Home. The deduction is then claimed on line 30 of Schedule C.
If you are an employee and use a part of your home for business, you may qualify for a deduction. You must meet the use tests discussed above plus:
- Your business use must be for the convenience of your employer.
- You do not rent any part of your home to your employer and use the rented portion to perform services as an employee.
Employees claim the deduction for business-use-of-home expenses as an itemized deduction on Schedule A (Form 1040) (PDF), Itemized Deductions. There is a worksheet in Publication 587, Business Use of Your Home, to calculate the amount of the deduction.
Note: Whether the business use of your home is for your employer’s convenience depends on all the facts and circumstances. Business use is not considered to be for your employer’s convenience merely because it is appropriate and helpful.
Category: Small Business, Self Employed, Other Business
Subcategory: Income & Expenses