How to Get a Tax Deduction for Your Home Office

One of the top tax deductions for this year is itemizing expenses for a home office or home based business. As tax time approaches, it's critical to understand which tax deductions are allowable for each particular individual taxpayer. Basically, the IRS allows a deductions for business use of a home or residence and it's your responsibility to know exactly what is an allowable IRS deduction and what is not. You obviously cannot deduct your entire home for business because you live there so follow the steps below to help you determine what portion of your home is used for business:

Determine if your home is actually being used for business by meeting 2 of the next 3 conditions:

• Determine if most administrative and managerial tasks are done from the home.

• Determine if your home office is a separate structure.

• Determine if you regularly meet clients and/or patients at your home in order to conduct business.

Determine which portion of your home is used for business. Divide the number of square feet used for a home office or home based business by the total number of square feet in your home. Working at a desk in your den or kitchen a few days a year isn't going to allow you to get the home office deduction. If that same desk is used on a regular basis and only for business, well then that may qualify.

Determine which expenses are allowable as deductions: rent or mortgage, portion of utility bills, travel expenses for business, computers used for business, etc. Check the IRS website for more specific details on what exactly is allowable.

Prepare your evidentiary documentation - that's just a fancy way of saying get all your receipts together. You'll need these to prove any expenses if you get audited or questioned by the IRS. If you haven't kept documents for last year and you want to get this deduction next year, start now by keeping a record of all business related expenses involving your home office or home based business.

Prepare your taxes using the proper forms for itemizing these particular deductions. Most good tax programs like Turbo Tax will help you to determine the best method for itemizing these deductions and provide the proper forms. If you want the deductions, you're going to have to itemize and use the long Form 1040 with attached Schedules. Consult the IRS website at www.irs.gov and check for specific qualifications for your particular tax situation.

If this all seems too confusing, it may be time to get some professioanl help. Start by visiting the IRS website at www.irs.gov, They have a great deal of helpful information there. If that still doesn't help, it may be time to consult a professional tax preparer or CPA.

Tip: Figure the deduction using both methods or consult a tax professional or CPA to determine which method is best for a particular situation. This information is not intended to be a source of legal advice, and no information in this article should be considered or relied upon as legal, tax or financial advice on any specific matter. Never act upon general information on legal, tax or financial matters without seeking legal counsel regarding your particular situation.

Consult the IRS website at www.irs.gov and check for specific qualifications for your particular tax situation.

Warnings: The information presented here is for the purpose of providing basic, general information. It's always best to consult a tax professional if you have any questions or if you need help. This information is for the purpose of providing basic, general information regarding the home office deduction.