HomeNeighborhood ProDo You Qualify for...

Do You Qualify for a Home Office?

By Michelle E. Botwinick, C.P.A.
If you’re self-employed and work out of an office in your home, and if you satisfy the strict rules that govern those deductions, you will be entitled to favorable home office deductions—that is, above-the-line business expense deductions for both the direct expenses of the home office (such as the costs of painting or repairing the home office) and the indirect expenses of maintaining the home office (a percentage of utility costs, depreciation, insurance, etc., for your home, as well as an allocable share of mortgage interest, real estate taxes, and casualty losses.) The three tests are:
Principal place of business. You’re entitled to home office deductions if you use your home office, exclusively and on a regular basis, as your principal place of business. (What exclusively and on a regular basis means is not entirely self-evident. Your home office is your principal place of business if it satisfies either a management or administrative activities test, or a relative-importance test. You satisfy the management or administrative activities test if you use your home office for administrative or management activities of your business, and if you meet certain other requirements. You meet the relative-importance test if your home office is the most important place where you conduct your business, in comparison with all the other locations where you conduct that business.
Home office used for meeting patients, clients, or customers. You’re entitled to home office deductions if you use your home office, exclusively and on a regular basis, to meet or deal with patients, clients, or customers. The patients, clients, or customers must be physically present in the home office.
Separate structures. You’re entitled to home office deductions for a home office, used exclusively and on a regular basis for business, that’s located in a separate unattached structure on the same property as your home—for example, an unattached garage, artist’s studio, workshop, or office building.
Space for storing inventory or product samples. If you’re in the business of selling products at retail or wholesale, and if your home is your sole fixed business location, you can deduct home expenses allocable to space that you use regularly (but not necessarily exclusively) to store inventory or product samples.
The amount of your home office deduction is subject to limitation based on the income attributable to your use of the home office. But any home office expenses that can’t be deducted currently, may be carried over and deducted in later years.
If you maintain your office in your home, you may also be entitled to a special tax break on your commuting costs. For most people, the cost of daily travel between home and a regular work location is a nondeductible commuting expense; however, taxpayers who have an office at home can deduct the daily costs of travel between home and another work location in the same business, regardless of distance and regardless of whether the other location is regular or temporary. You get this break only if your home is your principal place of business. In other words, you must meet the tests for deducting expenses of an office at home.
If your office at home isn’t your principal place of business, the costs of travel between your home and the first and last business stops of the day are nondeductible commuting expenses; however if you have a regular work location away from home, the costs of going between home and a temporary work location are deductible,. Generally speaking, employment at a work location is temporary if it is realistically expected to last (and does in fact last) for no more than a year.

Recent

AdvertisementAd for Cuong Nhu Martial Arts, Sung Ming Shu | 465 Boulevard S.E. Atlanta, GA 30312 Suite 202A | 404-525-4707 | sungmingshu@gmail.com
AdvertisementAd for East Atlanta Family Dental, phone 404-688-2223, web: www.eastatlfamilydental.com

More from Author

Calendar March-April 2023

CALENDAR Community Meetings GPNA (Grant Park Neighborhood Association). 3rd Tuesday of every month, 7:30pm-9:00pm....

Southeastern Trust for Parks and Land Acquires Conservation Easement

By Amanda Leesburg Southeastern Trust for Parks and Land (SE Trust), a...

Spring Blooms at Oakland with Family-Friendly Events!

Visitors enjoying last year's Illumine event Photo courtesy of Historic Oakland Foundation By...

EAV Farmer’s Market Springing Back

By Katie Kriner East Atlanta Village (EAV) Farmers Market is a-springin' back...

Read Now

Calendar March-April 2023

CALENDAR Community Meetings GPNA (Grant Park Neighborhood Association). 3rd Tuesday of every month, 7:30pm-9:00pm. Check www.grantpark.org for details. SAND (South Atlantans for Neighborhood Development). 2nd Thursday of every month, 7:30pm, Ormewood Church Fellowship Hall, corner of Woodland & Delaware Avenues. EACA (East Atlanta Community Association). 2nd Tuesday of the month, 7:00pm. See www.eaca.net for details. EABA (East Atlanta Business Association)...

Southeastern Trust for Parks and Land Acquires Conservation Easement

By Amanda Leesburg Southeastern Trust for Parks and Land (SE Trust), a 501(c)3 nonprofit corporation, acquires, conserves, and utilizes natural land for its mission of Conservation, Recreation and Community. SE Trust is proud to announce the creation and filing of a perpetual Conservation Easement for Tapestry Greenspace in...

Spring Blooms at Oakland with Family-Friendly Events!

Visitors enjoying last year's Illumine event Photo courtesy of Historic Oakland Foundation By Angie Wynne March and April are filled with fun, family-friendly opportunities to experience spring at Oakland Cemetery. Phoenix Flies, Atlanta Preservation Center’s annual celebration of historic sites, comes to Oakland on March 17 for an exciting “Geology in...

EAV Farmer’s Market Springing Back

By Katie Kriner East Atlanta Village (EAV) Farmers Market is a-springin' back up on Thursday, March 30, from 4:00pm-8:00pm. It will continue every Thursday 'til mid-November.  All your favorite farmers and vendors are back, as well some new faces,  live music, market chef with free samples, good vibes, all the...

Phoenix Flies Launches March 4

By Atlanta Preservation Staff Phoenix Flies 2023 celebrates 20 years that the Atlanta Preservation Center has brought together organizations and individuals from the community to demonstrate the value of Atlanta’s historic built environment. From museums to adaptive reuse projects, to neighborhood tours to public libraries, this year’s 90...

EACA Monthly Meeting Minutes – Thursday, February 14, 2023

Call to Order / Start Meeting Recording 7:00pm. January 10, 2023, Meeting Minutes approved. January 2023 Treasurer Report approved. Key January Events Recap – Chase Miller: About 30 people came to the MLK day of service to work at Branan Towers and two Neighbor in Need homes. We...

SAND Update – February 2023

By Kate Champion, SAND president SAND’s February 9 meeting was held in person with special guests, Council Members Liliana Bakhtiari and Jason Winston. You can find the questions asked and answered in the article below.  Several items of business were presented. The Ormewood Park Makers Festival will be held Saturday,...

GPNA Monthly Meeting Minutes – Tuesday, January 17, 2023

Call to Order–7:30pm. President’s Introduction. 2023 GPNA Goals: Website refresh - GPNA will finalize and implement the rebranded GPNA website. Sign toppers - GPNA will finalize neighborhood sign toppers project and implementation. Legacy neighbors outreach & support - GPNA will continue building on success from 2022. Community engagement -...

Madison Theater Participates in the GA Trust Historic Theater Tour 

Photo by Elena Kaplan Friends of the Madison Theater (left to right) include Stephanie Cherry-Farmer, Bill Gould, Jennifer Murray. Photo by Jenny Murry Stephanie Cherry-Farmer in front of the Madison Theater By Jenny Murray On February 11, the Madison Theater in East Atlanta was included in an “Historic Theaters Expedition”...

EACA Re-Launches the Friends of Brownwood Park Group

Photo by Patrick Cousins Park Pride, EACA and community leaders gather at Brownwood Park for a walk-through in January 2023. Left to Right: Michael Halicki, Executive Director of Park Pride; Ellen Bruenderman, Director of Community Services at Park Pride; Chase Miller, EACA President; Justin Cutler, City of Atlanta...

Council Member Liliana Bakhtiari Directs One Million Discretionary Dollars to Park Pride

By Nicholas Cappon Today, the Atlanta City Council adopted 23-O-1074, authorizing a contribution of $2.8 million in district-specific funds to Park Pride, with $1 million directly to park improvements and upgrades in Council District 5. “The health and vitality of a community can be measured by the growth and...

Legacy Neighbor Spotlight: James and Lillian Rowland

By Dee Dee Abbott Imagine buying a house in Grant Park for $450 down with a monthly payment of $57. This real estate reverie was a real estate reality for James Rowland. When James and his wife Lillian moved to Grant Park in 1965, there were only three other...