How to Make Home Office Tax Deductions Work Best Without Getting into IRS Trouble
Filed in archive financing by noel on October 30, 2007

Are You Qualified?
Before you start concocting up ways of obtaining the greatest possible tax deductions for your home office, make sure first that your place is indeed qualified for acquiring home office status. The IRS doesn't mince words with regard to terms of eligibility.
Regular and Exclusive Use of Home Office - While the IRS hasn't provided specific or standard rules for regularity, you must be prepared to prove at least that you're continuously using the home office you've indicated for managing your business. Working at least several days a week for a number of hours each day would most probably meet this requirement.
And as for exclusivity, the IRS will brook no argument on this score. The home office must be used exclusively for business purposes. No exceptions are allowed. If your child happens to use the computer just once for playing or writing his assignment, your home office is immediately disqualified for obtaining tax deductions!
Home Office Must Be Principal Place of Business - The office must be a separate unit on your home. It could be a room or an extension but the dividing lines must be clear. It must be the place where you meet clients, suppliers, and the like or the place where you conduct most of your management and administrative tasks. Also, you must have no other alternative or fixed location for you to manage your business in. Lastly, choosing to have a home office must be a decision made for the employer's convenience and not an employee's.
The IRS would be more amenable to approving your claim if you can provide them substantial proof of meeting the aforementioned requisites. To do this, you should, among other things, take note of expenses the moment you've incurred them and keep the receipts together with logging in details of each business meeting or appointment you have at the stated premises.
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