There is a room in our new house that nobody – and I mean nobody – is allowed to go in. It’s so important that nobody – not my husband, not my daughter, not my son – go in this room that I actually keep it locked when I’m not using it; why even leave it open to that kind of temptation? In fact, even though we’ve lived here for almost a month now, my kids basically don’t even realize this room exists; to them, it’s a closed door to nowhere.
What is this secret room, you ask? It’s my home office. And if you think I’m going overboard, like having a secret bank account, when it comes to keeping it under lock and key, even from my own husband, well, you may be right… or you may just not understand the home office deduction and how it affects my taxes.
“In order to claim a deduction for a home office, you must use a part of your home exclusively and regularly for business purposes,” the IRS plainly states on its website. When my husband and I were shopping for a new home, we had several things on our “must have” list: a great neighborhood, a finished basement, and a dedicated home office. Why not just a fourth bedroom that I used as an office? Because that wouldn’t meet the government’s criteria for getting that tax deduction – and as someone working from home, it’s a big tax break I wasn’t willing to give up.
My dad, a CPA, has seen people audited over the years because they fudged on their home office deduction. Perhaps they said they used their home office primarily for business, but also let their kids do their homework in the same room; that negates the deduction. Or maybe a husband and wife used the office together, the wife working and the husband brushing up on his blackjack strategy; that, too, puts the legality of the deduction in jeopardy.
I didn’t want there to be any grey area between my home office and that much-coveted IRS tax deduction, so I laid down the law as soon as we signed our names on the deed: nobody was to come into my home office, period. That way, we’d be following the IRS’s guidelines to the letter. I would be the only one to use my home office; I would only use it when I was working; I would work in it whenever I was doing my job. And now, should this post ever be discovered by the IRS, I have public, tangible proof that I am using my home office the right way!
Do you have a home office? Do you follow the letter of the law when using it, or do you skirt the law to claim the home office deduction?