David Kirkpatrick

February 20, 2010

The home office deduction

I’m going out on a limb to guess this tax year an entire slew of one time full-time employees have started businesses out of their homes, either because they became unemployed, their job was scaled back or they were forced into serious pay cuts. As a long-time freelance writer I’ve taken the home office deduction for years. When you work out of your home it’s a deduction you deserve, and should, take. My best advice on the topic? Find a reputable CPA and schedule a meeting immediately (these professionals are already very busy with the 2009 tax year season) to discuss how to handle your home office deduction. This is one tax dedution that pretty much requires professional help.

From the link:

IRS Publication 587, Business Use of Your Home, spells out the rules under which you can take a deduction for using your home as your office, manufacturing facility or warehouse.

Your home office should be used:

—Exclusively and regularly as your principal place of business, or

—Exclusively and regularly as a place where you meet or deal with patients, clients or customers in the normal course of your trade or business.

“Exclusively” refers to the requirement that the part of your home that you use for business cannot be used for any personal reason. The IRS doesn’t require that it be a complete room in a house, or that the space you use be partitioned. It does require that your home office or workspace be a “separately identifiable space.”


  1. I take this deduction, but the “separately identifiable space” definition is crucial. If you’re using one room as a combination home office/spare bedroom, declare only the square footage occupied by a desk, filing cabinets, etc. as home office space.

    Comment by Richard Buse — February 20, 2010 @ 2:14 pm

    • Great point on IDing the space used for a home office. This sort of technical detail is why I recommend consulting with a CPA, as opposed to a bookkeeper or just winging it. Particularly when taking the home office deduction for the first time.

      Comment by davidkirkpatrick — February 20, 2010 @ 2:53 pm

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