Home office deduction

Home office deduction

Host : Any other benefits for homeowners?

David : This isn't limited to homeowners, but if you work out of your home there's a better chance you'll be able to claim the home office deduction.

Due to a Supreme Court ruling, the old law said you could deduct a home office only if it was your principal place of business.

So, for example, if you were a traveling salesperson, you probably couldn't use the home office deduction because your "principal place of business" might be defined as your customer's office since that's where you really transacted business.

However, the new law says as long as you use your home office for necessary administrative activities, and no other fixed location is available, you might be able to claim the deduction.

Host : So I guess there's still a catch.

David : Right. The home office still must be used exclusively and regularly for work. So if your so-called home office was a card table you threw up at the end of the year in your family room, you won't qualify for the deduction. Also note this is only available in 1999 and subsequent years.