Tax Deductions:

Using a Part of Your Home for Business

To claim deduction for business your client runs out of his home he must meet the following criteria:

  • The part of the home that he uses for the business must be exclusive, meaning he can't use it as a home office by the day and a child's bedroom by night. An exception to this rule is if he uses this part of the home for a day care center or as storage space for the products he sells. The requirements for the storage space are the following:
    1.It's the only place he keeps these products because the space that they are in is suited for it. This means he cannot keep television monitors he sells under the sink and then claim the space for a deduction. He should keep all these products in a suitable storage area.
    2.His home is the only place he keeps these products, meaning he does not store it elsewhere outside the home.
    3.He uses this space regularly.
    4.He is in the business of selling
  • He uses this space regularly to conduct his business or dealings with clients.
  • It is used for business or trade that he is skilled in.
  • Your client's home office should be used for one of the following:
    1.Sole place of business or
    2.Sole place of business meetings, dealings with patients, and clients concerning his trade or business
    3.A separate room or building not attached to his house that he uses for your business or trade.

    Use should use IRS Form 8829, Expenses for Business Use of Your Home, to claim deductions related to home office usage.