Starting Your Business/Keeping Tax Records

What are Business Expenses

Home Office/Business Use of Your Home

New rules make it easier for your home office to qualify as your principal place of business. See Principal Place of Business.

To deduct expenses related to the business use of part of your home, you must meet specific requirements. Even then, your deduction may be limited.

This section describes the tests that you must meet to qualify for the deduction. Use this section, along with Figure A, to decide if you can deduct expenses for the business use of your home.

To qualify to claim expenses for the business use of your home, you must meet the following tests.

1. Your use must be:

A. Exclusive (however, see Exceptions to Exclusive Use),
B. Regular,
C. For your trade or business, AND

2. The business part of your home must be one of the following:

A. Your principal place of business for your trade or business, or
B. A place of business where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or
C. A separate structure (not attached to your home) that you use in connection with your trade or business.

Figuring the Deduction
Deducting Expenses
Where to Deduct
Worksheet to Figure the Deduction

Important References

Publication 587                                 Business Use of Your Home
Form 8829                                         Expenses for Business Use of your Home
Instructions for Form 8829
Form 1040 Schedule C                 Profit or Loss from Business