Ah, the home office. Many have tried to claim it, and many have failed.
That might be kind of an exaggeration. Maybe a more accurate statement would be, "A lot of people wish they could claim it, and sometimes they can." But you have to give people credit for trying: We all want to assume that the closet-sized, windowless room in our house serves a higher purpose than merely storing our extra dining chairs.
But this is no attempt to discourage you. If you can, by all means you should be claiming your home office. You just have to meet a certain criteria for doing it, and that includes using it regularly and exclusively as your principal place of business and as a place to meet with clients or associates. From there, the IRS offers a couple different ways to calculate your deduction: One method requires an algorithm to figure out a prorated amount based on your square footage, while the other "simplified" method offers a flat fee of $5 per square foot (up to $1,500) [source: Eisenberg].
Author's Note: 10 Common Miscellaneous Expense Deductions
I would suggest really taking a good look if you think it's worth it to itemize your deductions. The standard deduction is far simpler to take, and it really will relieve a good part of your tax bill.
- Bell, Kay. "Miscellaneous Tax Deductions." Bankrate. April 7, 2014. (October 4, 2014) http://www.bankrate.com/finance/money-guides/taking-advantage-of-miscellaneous-deductions-1.aspx
- Cussen, Mark P. "An Overview of Itemized Deductions." Investopedia. 2014. (October 4, 2014) http://www.investopedia.com/articles/taxes/08/itemized-deductions-overview.asp
- Eisenberg, Richard. "Get the Biggest Tax Write-Off for Your Home Office." Forbes. February 11, 2014. (October 4, 2014) http://www.forbes.com/sites/nextavenue/2014/02/11/get-the-biggest-tax-write-off-for-your-home-office/
- IRS. "Publication 17." 2013. (October 4, 2014) http://www.irs.gov/publications/p17/ch28.html#en_US_2013_publink1000174104
- IRS. "Publication 463." 2013. (November 1, 2014) http://www.irs.gov/pub/irs-pdf/p463.pdf
- IRS. "Publication 529." 2013. (October 4, 2014) http://www.irs.gov/publications/p529/ar02.html
- IRS. "Publication 587." 2013. (October 4, 2014) http://www.irs.gov/pub/irs-pdf/p587.pdf
- IRS. "Topic 149." Aug. 19, 2014. (Oct. 4, 2014) http://www.irs.gov/taxtopics/tc419.html
- Kim, Susanna. "7 Tax Deductions That Set off Alarms." ABCNews. April 16, 2012. (Oct. 4, 2014) http://abcnews.go.com/Business/tax-deductions-set-off-alarms/story?id=16134151
- Phillips Erb, Kelly. "Back to School 2014." Forbes. Sept. 8, 2014. (October 4, 2014) http://www.forbes.com/sites/kellyphillipserb/2014/09/08/back-to-school-2014-expired-educator-expenses-unreimbursed-employee-expenses/
- Phillips Erb, Kelly. "IRS Announces 2014 Tax Brackets, Standard Deduction Amounts and More." Forbes. Oct. 31, 2013. (Oct. 4, 2014) http://www.forbes.com/sites/kellyphillipserb/2013/10/31/irs-announces-2014-tax-brackets-standard-deduction-amounts-and-more/
HowStuffWorks examines the fate of the personal exemption in light of the tax reform laws of 2017 and it affects 2018 income tax refunds.