Tax Benefits of a Home Office

Can and how do I take home office deductions if I am self-employed?

You can take home office deductions if you qualify and it can save you thousands on your taxes. To qualify you must meet one of three tests –
It’s your principal place of business.
You use it to meet clients, patients or prospects in your normal course of business.
It’s a separate structure not attached to your main home.

Your deduction is based on your business use percentage which is the square footage of you office divided by the square footage of your home. You can deduct rent, mortgage interest and property taxes. You can depreciate BUP your home’s basis over 39 years. You can also deduct BUP of utilities, repairs, insurance, garbage pick up and security.