subject: Following The Rules For A Home Office Tax Deduction [print this page] Business owners who use their home as a business location are entitled to a tax deduction. But the office space must be used exclusively and regularly for business. A specific area that incurs "exclusive use" means it is used only for business purposes. For an area to have "regular use" it must not have only incidental or occasional business use.
A tax enrolled agent is a valuable consultant for helping business owners understand the IRS rules. In addition, enrolled agent continuing education provides deeper knowledge about other applications of this tax deduction.
For example, the home office deduction may also be available for business owners with a different primary location. As explained in an enrolled agent course about this subject, the area of a home claimed as an office must always have exclusive and regular business use. When it's not the principal place of business, it must be used for meeting or dealing with clients, customers, or patients in the normal course of business.
A home office tax deduction is also available for a separate structure-not attached to the main house-that is exclusively and regularly used for business. Storage locations have a different rule. They are only required to have regular use but not necessarily exclusive use.
Owners of corporations-including S corporations-must meet the IRS standards imposed upon employees for claiming a home office deduction. For an employee to deduct home office expenses, the regular and exclusive business use must be for the convenience of the employer. When a home office is merely helpful, no tax deduction is permitted for business use of the home. The convenience requirement is clearly met when the home is the only location for corporate business. However, the convenience condition is more difficult to defend when the corporation has a primary location that's different than the home office.
Enrolled agent CPE requirements provide a review of important characteristics of the tax code. This permits those with an EA license to offer valuable advice about complex situation such as the home office tax deduction.
