Issue Date: September 28, 2008
MoneySmart |
SHARON EPPERSON |
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Tax break on your home office?
Do you work from home? You may be eligible for deductions.
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More Americans might consider a home office if they thought about the savings -- money spent on gasoline, time spent commuting and dollars given to Uncle Sam.
If you work mainly from home, you may be eligible for a break on your federal income taxes. "Some people don't claim this deduction because they think it's a red flag for an audit," says Mark Luscombe, principal tax analyst at CCH, a software and information services provider. "But if you're entitled, you should claim it."
Just be sure you know the rules: You have to use a portion of your home "regularly and exclusively" as your primary business space or "a place to meet or deal with your patients, clients or customers." If you meet that criteria, you may be able to deduct at least part of a range of household expenses.
To figure out the "business percentage" of your expenses, divide the square footage of the room you use for business (say, 200) by the total square footage of your home (say, 2,000) to arrive at the percentage (10%).
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