During the COVID-19 pandemic, there’s a good chance you’ve been working from a space inside your home, some of the time or all of the time.
This means that you may be eligible for a valuable home-office deduction!
In order to help you qualify for the deduction, in this issue of the Tax Reduction Letter, we’ll provide answers to three important questions you need to ask yourself:
- “Can I use just part of a room as an office and still get the home-office deduction?”
- “Can I claim that I’m using multiple rooms for business purposes?”
- “Can I deduct the portion of my home that I use for storing business items?”
To make sure you come up with the right answers, and keep the IRS happy, I urge you to read my new article titled Tax Tips: How Many Whole or Partial Rooms Can You Use for Your Home Office?
Here are the two words that can make or break
acceptance your home-office deduction claim.
“Exclusive” and “Regular”
Section 280(c) of the tax code states that you can claim a home-office deduction based on the portion of your dwelling that you use “exclusively” and “regularly” for business.
~~~~~~~~~~~~~~~~~~~~~~~~~~
Relevant court decisions
The Mills case. How Mr. Mills qualified for the home-office deduction based solely on the space he used for business in his small, cramped apartment.
The Hefti case. How Mr. Hefti qualified to deduct thirteen rooms as his home-office deduction.
The Pearson case. How Dr. Pearson stored his voluminous patient records in his home but failed to qualify for a home-office deduction.