Doing my quarterly taxes - what are some write-offs I can take if I work from home?

alanj answered 3 months ago …

jillybeansisme states that "You must have a specific area devoted strictly to the business and that square footage cost can be part of your deduction."(It's not a true deduction, it's a delay of paying the tax) That also means you can't use that area for anything else. It must be for business only. The square footage deduction is if you have a mortgage. You can write off that percentage of your home of the mortgage payment. You'll need an amortization schedule that will show how much of your monthly payment goes toward the principle and how much goes toward the interest, for each month. But note, if you sell your home the portion you have already written off has to be deducted from the original purchase price. I believe that would be just the principle amount not the interest. You will have to pay the tax on that area either now or later when your home is sold. (Either by you or your heirs) Is it worth the extra time, effort, paperwork to simply delay paying the tax on that area? Only you or your tax consultant can answer that. And, do you think you will be in a higher tax rate bracket in the future when the home is sold sometime in the future? If your home business does well, then you most likely will be? So, where's the benefit of paying the tax later? Writing off a percentage of your home mortgage for your home office space may not be your best choice. This should be discussed with a qualified tax advisor.

As for other expenses, anything that is purchased and used for the business is deductable. If the expense is partly for the business and partly for personal use, you can usually deduct it on a percentage use.