Home Office Expenses
The most frequently asked tax questions related to Home Office Expenses
For Tax Payers
Need professional help with a specific tax issue or have general tax questions? Ask a CPA is the easiest way to get advice from a licensed accountant in our network.
Ask a Tax QuestionFor Accountants
Provide answers to tax questions and introduce your practice to new potential clients. Build your CPAdirectory profile and earn reputation points.
Answer Tax QuestionsCan I deduct my phone charges as a home office deduction?
Asked Monday, November 28, 2011 by an anonymous user
The basic monthly phone charge for your first telephone line to your home cannot be deducted. Long distance calls or call forwarding, call answering, call waiting used for business can be deducted.
You may deduct the entire phone bill for a second phone line used exclusively for business.
Also additional phone lines dedicated for fax lines are 100% deductible.
You may deduct the entire phone bill for a second phone line used exclusively for business.
Also additional phone lines dedicated for fax lines are 100% deductible.
Can I deduct a loss on business that claimed home office deductions?
Asked Monday, November 28, 2011 by an anonymous user
Home office deductions cannot exceed gross income from the home office activity.
Are my home office deductions lost in the year they were limited?
Asked Monday, November 28, 2011 by an anonymous user
Home office deductions cannot exceed your gross income from your home office activity. If in a year that home office deductions were limited due to the gross limitation then the unused deductions are not lost buy carried forward to future years to be used in a year when gross income exceeds the home office deductions.
Can I claim home office expenses for a day care facility?
Asked Monday, November 28, 2011 by an anonymous user
A person who does not meet the exclusive use requirement because the use is for a day care facility will still qualify to deduct expenses as a home office. The day care must be for children, handicapped persons or persons 65 or older. You must have a license, certificate registration or other approval as a day care center under state law.
Do I lose any of my home sale exclusion if I claim a home office deduction?
Asked Monday, November 28, 2011 by an anonymous user
You will not lose any of the $500,000 (married filing jointly) 250,000 (non-jointly filed return) residence sale exclusion if you previously claimed a home office deduction.
However, any depreciation taken after 5/6/97 must be recaptured at a rate of 25%.
You cannot avoid this recapture by not claiming depreciation as a deduction in a given year.
However, any depreciation taken after 5/6/97 must be recaptured at a rate of 25%.
You cannot avoid this recapture by not claiming depreciation as a deduction in a given year.
What is the IRS publication that explains home office expenses?
Asked Monday, November 28, 2011 by an anonymous user
IRS publication 587 explains the details of deducting a home office.
What expenses are deductible in my home office?
Asked Monday, November 28, 2011 by an anonymous user
Expenses directly allocated to the home office such as painting the office or buying furniture for the office are 100% deductible. Other expenses indirectly incurred are deductible at a business expense allocation percentage. These would include Real estate taxes, mortgage interest, depreciation, utilities, rent, insurance, snow removal and security.
How do I allocate indirect expenses in my home office?
Asked Monday, November 28, 2011 by an anonymous user
Generally the number of rooms identified as the home office divided by total rooms equals your percentage of business use.
What documentation is needed to deduct a home office?
Asked Monday, November 28, 2011 by an anonymous user
In addition to actual receipts of expenses paid, It is a good idea to photograph your home office and keep it with the tax return it is being claimed on. This would add to the proof requirement of business use exclusivity.
