How Tax Deductions Work
August 21st, 2009
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Question: Can I have a Tax Deductions for rent, utilities if I work from home and receive a W-2 from my employer?
I would like to know if i can deduct a percentage (25%) of my expenses (rent, utilities, phone, computer) since I work from home and i have an exclusive office. I received a W-2 from my employeer, PLEASE ADVISE……
Answer: Yes, as long as you don’t use the office for personal (non-work) things–the room has to be used regularly and exclusively as your office. We use this deduction because my husband telecommutes and has an office in our house–the office isn’t used for anything else (this is an important condition of the deduction).
The percentage is based on the square footage of the office compared to the square footage of your entire home (or divide the number of rooms used exclusively for business by the total number of rooms in your house if the rooms are the same size in your home). So you would use 25% if you had, for example, 4 rooms that are about the same size, and your office was one of those rooms, or if your office took up about 25% of the space in your home (the percentage we use is 10%, as his office is 10% of our house).
You can deduct the room’s portion of real estate taxes, mortgage interest, rent, utilities, insurance, painting, repairs and depreciation.
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