Could your home office deduction pass an audit?

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07/15/2015 | Author: Editorial Staff

Deducting expenses for your home office may bring you tax savings, but it’s also an easy way to draw attention from the IRS. Follow the IRS requirements on this topic, and consider these questions before you make such a deduction:

Do you use the space exclusively for business? Your office can be an entire room or another separate space in your home, but you can’t use the space for business and personal purposes.

Do you use the space regularly for business? Occasional business use isn’t enough.

Is your home your principal place of business? If you use your home office exclusively and regularly for administrative or management activities (e.g., billing clients, setting up appointments), then you may qualify for the deduction—even if you maintain another office location.

Do you meet with clients in your home office? Holding in-person meetings with clients in your home office may qualify you for the deduction. It’s not enough to use your home just for occasional meetings and phone calls.

Home-office deductions are a potential red flag for an IRS audit, so you should seek professional advice about this deduction. 

Categories: Business tips
Tags: tax deductions, taxes, irs, home office


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The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

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