| My clients here in Las Vegas often ask me about | | | | home that is used for your office, for example lets say |
| taking a deduction for their home office. This can be a | | | | you use a room that is 10 x10 as your home office |
| good deduction for small businesses, but one has to | | | | and your home is 2000 sq ft so 5% of your home is |
| weight whether the deduction is worth the IRS taking a | | | | considered as office space. Next we now have to |
| close look at the eligibility of your home office. Small | | | | calculate the deduction; you will need to have at least |
| businesses should refer to form 8829 for expenses | | | | an estimate of your profit. An important fact to keep in |
| for business use of your home. There are some | | | | mind your home office deduction cannot turn your |
| eligibility requirements that the IRS requires you to | | | | profit into a loss this will be disallowed it can however |
| meet they are as follows: | | | | reduce your profit to zero. Then enter your expenses |
| Be a legitimate business - this is pretty self | | | | for casualty losses, mortgage interest and property |
| explanatory | | | | taxes. The last step would be to multiply the |
| Your home should be your principal place of | | | | percentage of my space used by the expenses and |
| business, do you have other locations? Do you use | | | | that would be my deduction. Usually the deduction is |
| that location a higher percentage of the time than your | | | | not huge but it all adds up. Before using or calculating |
| home office? | | | | any deductions you should check with your tax |
| Be used exclusively for your business | | | | advisor to make sure it is applicable to your business. |
| The next step is to determine the percentage of your | | | | |