Can I Deduct My Home Office?
The home office deduction is how self-employed taxpayers can deduct expenses associated with an area of their home used regularly and exclusively for business (with the exception of inventory storage and home daycare facilities). This commonly means a home office space but can be expanded to include any other space that is dedicated to business functions. Any part of the home that is used both for personal and business purposes may not be used to figure a deduction.
There is another caveat with the home office deduction that should be noted: The home office deduction cannot create a loss. The amount you are allowed to deduct for business use of your home cannot exceed your gross profit, potentially reducing your gross profit to $0 but not creating a loss.
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