As a work-at-home entrepreneur, are you taking full advantage of the tax deductions of your home office? Whether you use your home office space for placing client calls, managing administrative details, or even meeting business clients, you could reap significant small business tax deductions.
It is certainly possible to write off a portion of your personal mortgage or rent as a small business tax deduction. However, there are restrictions involved. Many small business owners never take the home office tax deduction allowed by the IRS, while others mistakenly do so, even when their home office does not meet IRS requirements.
Here is a look at restrictions and guidelines that you can use for your home office tax deduction.
IRS Guideline #1: Primary Office
First, your home office must be your principal place where you conduct your small business activities. For your home office to be tax deductible, you must use it regularly as the primary place of your business.
Many small business owners rent or use other office space and occasionally work out of their home. Real estate agents are a good example. However, if you use a specific space in your home as a second office, then it does not count toward a tax deduction.
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