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Maximizing Your Home Office Deduction

Writer's picture: Christopher AbellChristopher Abell

Updated: Jul 2, 2024

As a small business owner, optimizing your tax deductions is crucial. One valuable deduction is the Business Use of Home Deduction. The IRS allows you to deduct certain expenses if you use part of your home exclusively and regularly for business purposes. However, it's important to understand the specific rules to ensure compliance and maximize your benefits. 


Household Expenses 

When managing your business finances, it’s essential to keep your personal and business expenses separate. Household-related expenses should always be paid from a personal account, not your business account. These household expenses include: 


  • Rent/Mortgage: Payments for your living space should come from your personal funds. 

  • Utilities: Gas, electricity, and other utility bills should not be charged to your business. 

  • Renters/Homeowners Insurance: Insurance for your home is a personal expense. 

  • Water/Sewer/Trash: These services are part of your household expenses. 

  • Décor: Home decorations should not be deducted as business expenses. 

  • Furniture: Furniture for personal use should be purchased with personal funds. 

  • Cleaning/Maintenance: Household cleaning and maintenance costs should be kept separate from business expenses. 


Business Use of Home 

To qualify for the Business Use of Home Deduction, the expenses must be directly related to your business activities and used in your dedicated business space. These business expenses can be deducted if they meet the criteria set by the IRS. Examples include: 


  • Desk Lamp: Lighting specifically for your business workspace. 

  • Desk: The desk you use exclusively for business tasks. Office Rugs: Floor coverings in your home office area. 

  • Printer: The printer used for your business documents. Scanner: Essential for digitizing business documents. Shredder: For securely disposing of business-related paperwork.

  • Office Rugs: Floor coverings in your home office area.

  • Scanner: Essential for digitizing business documents. 

  • Shredder: For securely disposing of business-related paperwork.


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