If the office measures 150 square feet, for example, and the total area of the house is 1,200 square feet, your business percentage would be 12.5%. An easier calculation is acceptable if the rooms in your home are all about the same size.
What are the allowable expenses for business use of home?
Deductible expenses for business use of your home include the business portion of real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance, and repairs.
What deductions can I claim with a house?
- Mortgage Interest. If you have a mortgage on your home, you can take advantage of the mortgage interest deduction.
- Home Equity Loan Interest.
- Discount Points.
- Property Taxes.
- Necessary Home Improvements.
- Home Office Expenses.
- Mortgage Insurance.
- Capital Gains.
Can I deduct a portion of my mortgage for home office?
Mortgage and RentYou can't deduct your mortgage payments. Mortgage interest and rent payments can be deducted, but only the portion that applies to your home office. The IRS has a home office deduction worksheet that will help you calculate this (scroll to the bottom of the document).
Can I write off my Internet bill if I work from home?
If you're a freelancer, a small business owner, or otherwise self-employed, you can likely deduct at least part of your internet bill. If you're a W-2 employee who works remotely, you can't. (Sorry.) However, you might be able to get reimbursed by your employer.