Wondering If You Can Take A Home Office Deduction?

If you are small business owner and use part of your home exclusively for business then you may be able to take a deduction for your home office.  In order to be able to take the deduction then you must you the “home office” portion of your home:

  • Exclusively and regularly as your principal place of business, as a place to meet with clients or customers in the normal course of your business, or in connection with your business where there is a separate structure not attached to the home; or
  • On a regular basis for certain storage use such as inventory or product samples, as rental property, or as a home daycare facility.

If you meet this test then you may take as a deduction the business portion of any real estate taxes, mortgage interest, utilities, insurance, rent, painting, repairs, and improvements, and depreciation.

Also, if you are an employee who as a home office then you can only take this deduction if the office is used exclusively for business at the convience of the employer and that portion of your home is not rented by your employer.

If you have a den in your house that you use for business and your family also uses for watching TV, using the computer, or doing their own work, then you do not have an office that can be deducted.  The office must be exclusively used for business – meaning no other activities can be performed there.

It is always best to seek the advice of a tax professional before deciding whether or not you qualify for the home office deduction.


About the author

Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. Since 2002, he has owned his own small business, Huddleston Tax CPAs. He is a graduate of Washington State University and the University of Washington School of Law.