RULES COVERING HOME OFFICE DEDUCTIONS

Many people operating businesses have offices in their homes for scheduling appointments, paying bills, and keeping business records. Depending on your circumstances, expenses related to your home office may be deductible. Your home office may be in any type of residence such as a house, apartment or boat. You do not need to own your home in order to claim an "office in the home" deduction. A garage or storage area can be considered when determining whether you qualify for the deduction.

Qualifying for a deduction
Your use of the business part of your home must be:

1. Exclusive (use a specific area of your home only for trade or business)

2. Regular (on a continuing basis, not occasional or incidental)

3. For your trade or business

AND

The business part of your home must be one of the following:

1. Your principal place of business

2. A place where you meet or deal with customers in the normal course of your trade or business, or

3. A separate structure you use in connection with your trade or business.

Employee use of home business
If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. You must meet the tests discussed above plus:

1. Your business use must be for the convenience of the employer, and

2. You do not rent any part of your home to your employer and use the rented portion to perform services as an employee.

Storage of inventory or product samples
If you use part of your home for the storage of inventory or product samples, you can claim expenses for the business use of your home without meeting the exclusive use test. However, you must meet all the following requirements.

1. You sell products at wholesale or retail as your trade or business, and

2. You keep the inventory or product samples in your home for use in your trade or business, and

3. Your home is the only fixed location of your trade or business, and

4. You use the storage space on a regular basis, and

5. The space you use is an identifiably separate space suitable for storage.

The information set forth herein was obtained from sources that I believe reliable, but I do not guarantee its accuracy.

IMPORTANT DOWNLOADS
Charitable Contributions
Energy Efficientcy Home Credit
Tax Rate Schedule 2007
Household Employees
Tax Cheat Sheet

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COMMON QUESTIONS
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Contact the IRS Refund Hotline at 800-829-1954 or on the web at http://www.irs.gov click the "Where's my refund?" link.

The taxpayer will need: their Social Security Number (SSN); the filing status of the return you are calling about; the exact refund amount as reported on the originally filed tax return.

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