Self-employed people can deduct their home office expenses from their business income if their office qualifies. This includes people who work from home full time, as well as people who have a freelance side gig – even though they may also work for an employer – and people who were self-employed for just a few months.

If you use an area of your home exclusively and regularly for work you are eligible to write off your home office. The simplified formula for calculating your home office deduction is Sq. Ft X $5

There are two exceptions. If you provide daycare services for children, elderly (65 or older) or handicapped individuals in that part of the house, you can probably still claim business deductions, as long as you have a license, certification or approval as a daycare center under state law, according to the IRS. The other exception is if you use the office for storage of inventory or product samples you sell in your business.


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Ray Halstead and Andrew McMillan are managing partners at REH CPAs in Mooresville, NC. They focus on helping small business owners with their bookkeeping, accounting, taxes, and ultimately allowing them to stay out of their books and in their business.

If you want to speak with someone about your small business taxes, give REH CPAs a call at (704) 662-8249.

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