- The area you claim as your home office must be used regularly and exclusively for business. It can’t be the guest room, fixed up for guests with a desk in the corner. Stop using it for guests and use it exclusively for business and then it qualifies. An exemption might be a day care center, where both family members and day care share areas of the home.
- To qualify, the area of the home office must be the principle location where you conduct business. Yet, exceptions can apply. For example, you might have a studio in your home where you regularly meet clients or a home office where you see patients. If you use those areas exclusively for business, even if you have another business location, you can charge yourself rent.
- You cannot base the total amount of office rent on your total housing expense. Instead, calculate the rent in proportion to the percentage the office space occupies in your home. For example, if your house is 1,000 square feet, and your office space is 100 square feet, your business space takes up 10 percent of your home. Therefore, you can use 10 percent of applicable expenses of your home when calculating the rent to charge.
- Normally you can only rent a portion of your home as a home office when you are self-employed. Yet, it is possible to charge yourself rent for a home office when you work for an employer. The office use must be for the convenience of your employer, as opposed to your convenience, and you must not receive any rent from the employer regarding the area. For example, if you take work home, which can be done at the office, you may not qualify for the deduction. Yet, if your work for a service call center, and instead of working from an office, your employer expects you to take calls from home, you would probably qualify for a home office deduction, providing the employer didn’t compensate you for the home office.
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