Tax Write Offs for Your Home Office

If you're self-employed and use part of your home as your workspace, you might be able to take deductions for it. However, you need to be cautious here. If you slip up, you can end up owing instead of saving.

Claiming Business Use in Your Home:

Be cautious when you are claiming portions of your home for business use. People frequently make mistakes with these kinds of deductions. The business portion of your home must be one of the three following:

• Your principal place of business;

• A place where you meet or deal with your patients, clients, and/or customers; or

• A separate structure not attached to your home.

It Doesn't Have to Be Exclusive

The business portion of your home doesn’t have to be used exclusively for business. Examples include using the space to store products or using the space as a daycare facility.

Get the Space Measurements

Many people use portions of their home for business purposes, if not run their business out of their home. You need to know what size the space is in order to have a complete deduction, which can save you money in the long run.

Just the beginning

There are many ways freelancers and self-employed workers can claim deductions and reduce the amount they owe the IRS. Review your receipts and records for the 2010 tax year and see what qualifies.