What utilities can be deducted for a home office

Tax Deductions for Home Office: A Guide for Small Businesses

what utilities can be deducted for a home office

If you use part of your home for business, you may be able to deduct These expenses may include mortgage interest, insurance, utilities.

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If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and renters, and applies to all types of homes. For taxable years starting on, or after, January 1, filed beginning in , you now have a simplified option for computing the home office deduction IRS Revenue Procedure , January 15, The standard method has some calculation, allocation, and substantiation requirements that are complex and burdensome for small business owners. This new simplified option can significantly reduce the burden of recordkeeping by allowing a qualified taxpayer to multiply a prescribed rate by the allowable square footage of the office in lieu of determining actual expenses. Taxpayers using the regular method required for tax years and prior , instead of the optional method, must determine the actual expenses of their home office.

If you are self-employed and have a home office, you might qualify to claim a home office deduction. This means you can deduct expenses for the business use of your home. To do so, both of these must apply:. Note: Before , employees could deduct unreimbursed employee business expenses, including the home office deduction if eligible, as miscellaneous itemized deductions on Schedule A. For tax years through , tax reform has eliminated the itemized deduction for employee business expenses. Thus, employees may not claim a home office deduction for these years. Exclusive use Exclusive use means you use a specific area of your home only for trade or business purposes.

If you work at home — even just part-time — you may claim a tax deduction for expenses related to your home office. The new tax laws, however, may affect whether you are still eligible to claim those costs as a tax deduction. Read further to find out why. Before the Tax Cuts and Jobs Act TCJA went into effect, you could deduct unreimbursed job expenses that exceeded two percent of your adjusted gross income on your income tax return. The new tax law did away with deductions for unreimbursed employee expenses.

If you have a home business , you want to be able to claim the expenses associated with this business on your tax return. As with a business in any other location, you are allowed to claim a deduction for use of this space on your business tax return. To qualify for this business tax deduction for your home business, you must meet certain basic requirements. This article explains these requirements, shows you how to calculate the deduction percentage, and details about the specific expenses you can deduct from your taxes if you qualify. To determine which method to use, you will need to know how to calculate the space as a percentage of your home's usable space.

Federal Taxes

The home office deduction allows you to deduct expenses directly related to maintaining your home office. You can also deduct a portion of certain expenses that are associated with your home, but are not deductible by the average homeowner. These expenses include insurance, utilities, repairs, security system expenses, maid service, garbage disposal, and decorating expenses. If you are using the new Simplified Method to determine your home office deductions, you do not need to worry about the classification or allocation of expenses. Oftentimes, you will be able to claim a larger deduction by slogging through these calculations, but the savings may not justify the hassle. For more information on the simplified method—and pointers on how to decide which method to use—see our article, " Should I Use the Simplified Home Office Deduction?


  1. Henriette G. says:

    Will a home office deduction trigger an audit? . bills for utilities,; homeowners insurance,; homeowners association fees,; security, and; general repairs and.

  2. Aloin G. says:

    If you run a small business out of your home, you might be eligible for some big savings. Here are the requirements for the home office deduction this year. the IRS lets you write off associated rent, utilities, real estate taxes.

  3. Adodalsu says:

    The home office deduction can save you taxes.

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