Tax deduction question?

Question

I am self employed and using Turbo Tax schedule C this year for the first time.I work away from the home,but conduct some of my business from my home office.Can I deduct household expenses?Electricity? Home heating oil? Repairs? Please don't answer if you are not sure.Thanks.

Answer 1

Your home office must satisfy specific criteria. Take a look at this IRS link: http://www.irs.gov/newsroom/article/0,,id=108138,00.html

My home office satisfies this and I do deduct a portion of the utilities along with depreciation, property taxes, and monthly expenses (i.e. fax line, internet access, etc).

Be careful though. This deduction has been abused in the past so the my CPA advises to follow the guidelines to the letter. There's a few other details so be sure to read up.

Good Luck!

Answer 2

You can take a deduction for a home office if you meet the criteria for doing so. Since you are self employed you meet the employer convenience test. The area you set aside for your home office must be used exclusively for that purpose and no other. Even occasional personal use disqualifies the entire deduction. You must apportion the expenses based upon the square footage used for your home office vs the total floorspace of your home for utilities, mortgage interest, property taxes, repairs, etc. Direct business costs (say a business phone line) are fully deductible.

Answer 3

You probably need to have a door on your office and use that room for nothing else. If I'm wrong, so what? I'm just some anonymous guy on the internet. Read the IRS publication carefully, and if you are still confused go see an accountant.