Can I deduct my home office on a tax return? I work full time in an office building, but also work a decent?

Question

amount from my apartment. Is this deductible? I have nothing but office stuff in my study and never really even go into the room unless I am doing work for my company.

If this is deductible what all should I do for documentation?
* Take a picture of the room?
* Print out documentation of my VPN Broadband account information.
* Floor plans of the apartment to prove the size of the room?
* Do I need to get copies of all my electric bills and DSL charges?

Thanks.

Answer 1

First of all, you'd need something in writing from your employer stating that you need to work from home as well as work at work. Then you would have to fill out form 8829 - office in home, and also Form 2106 - employee business expenses (which is where the form 8829 would flow to). The Form 2106 would flow to Schedule A - Itemized Deductions under miscellaneous deductions and you'd have to exceed 2% of your AGI to deduct the excess, and you'd have to itemize rather than take the standard deduction for it to do you any good at all. I've included links to forms 8829 & 2106.

Basically, what you'd need to do would be figure out the square footage of your entire home and the square footage of your home office. You can expense that % of the expenses that are for your home (mortgage interest, real estate taxes, insurance, utilities, repairs, etc), but the office has to be used solely for your work.

Answer 2

Home office deductions are allowed for both self-employeds and employees. However, these deductions are limited to some strict limitations. For example, you can only use those expenses allocable to that part of your home. If your "office" is 13% of your home, you can only deduct 13% of expenses that benefit all of your home, including the office (ex. utilities).

In addition, if you are an employee, home-office expenses are considered miscellaneous itemizable deductions. Meaning in order to claim them, 1. it must be worth it to you to itemize, and 2. the only expenses allowed would be the amount that exceeds 2% of your adjusted income. Often times it is found that the deduction as an employee just isn't beneficial.

The hard part is proving that you are eligible to claim the deductions as the regulations regarding it are even stricter. It sounds like you're not eligible, but here is the gist of it.

The home must be the PRINCIPAL place of business meaning you must either:
1. perform "administrative/management" activities of the business at that location. You also must prove you perform those activities there more than you do at the office provided by your employer.

or 2. must be able to prove that the majority of your time is spent using your home office rather than the one provided by your employer, or that the activities performed there are more important.

So, if you're simply bringing home work for clients etc., you can not take the deduction. You can also find more information in Publication 587 provided by the IRS, which is accessible (if you have an Adobe Acrobat Reader) from their website at www.irs.gov.

Hope this helps!!

Answer 3

Another thing to think about is this: You didn't mention if you are an independent contractor for the company or not. That means that you would most likely receive a 1099-misc instead of a W-2 at year's end. If you do receive a 1099, then you can deduct expenses from your home office. Things such as office expenses, supplies, travel and equipment.

Answer 4

You have an office at work. Does your employer require you to have an office at home? Doesn't seem like it. He may require you to do work after hours, but he is not requiring you to set aside space exclusively for work.

So sorry, it doesn't seem like you could take the office in home deduction.

Answer 5

To be deductible, a home office must be for the "Employer's Convenience", not your convenience and it must be used "regularly" and "exclusively" for work.

Short of a letter from your employer requiring you to have an office at home, you may run in to problems.

Answer 6

You can deduct a percentage - since you have a place of business. Things like this are an audit flag, I'd make sure it was worth the risk if I were you.

The square footage of the office - as a portion of the rent - and only a percentage of that (you're using it for personal use now - it's not ALL company use). Generally this is used if the home is the principal place of business

http://www.irs.gov/newsroom/article/0,,id=108138,00.html
http://www.irs.gov/faqs/faq-kw84.html

You might be better off seeking reimbursement for expenses from your employer.

Answer 7

This is one of the top 5 deductions that trigger audits!
If you can withstand an expensive audit then go for it.

Answer 8

u have to declare the office premises investment in your balance sheet and take the advantage of depreciation