| What can I write off tax-wise by working remotely from my home office?

What can I write off tax-wise by working remotely from my home office?

Emily B asked:


I started a new job May 1st where I work from my home office. I’m a Sales Director and my corp office is in Phoenix. My company already pays for my landline phone and high speed internet service. I am being told that I can write off part of my mortgage as well as my utility bills. Other than telling me to talk to an accountant I am looking for some quick answers. Thanks!
And yes… my company expects me to maintain my home office so it’s not a personal choice but a corporate one.
I am using one of my bedrooms exclusively as an office and I work 8-10 hours a day in this space. My taxes are professionally done so I am sure I will get my answers tax time. I just wanted to get a heads up on some of the stuff I could write off.

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Comments

5 Responses to “What can I write off tax-wise by working remotely from my home office?”

  1. Judy on May 27th, 2009 9:39 pm

    If you use a specific area of your home regularly and exclusively for business, you can probably write off quite a bit - see,,id=108138,00.html and the various links from that page.

  2. Kryp2knight on May 28th, 2009 12:05 pm

    I am not sure how a work from home job compares to a Home Based Business, but I was able to write off my Cell Phone, Phone line, pens, paper, ink for printer, partial mortgage, partial utilities, internet, etc… All things for my Home based business.

    You can only get credit on partial mortgage and utilities because you are only taking up a portion of your residence.

    Again I do not know if a stay at home job would enable you to write these things off, but this is just one benefit of having a home based business. The tax benefits are worth having it even if you make Zero money doing it, as they are all expenses. We were able to get an extra $800 on our tax return because of these deductions.

    I would recommend talking with a tax adviser first before trying.

  3. Wayne Z on May 29th, 2009 7:53 am

    Your mortgage is already deductible. It makes no sense to allocate some of it to the home office.

    First of all, you need an area of the home that is used “regularly” and “exclusively” for the work activities. Exclusively means exactly what it says. You use this area for nothing but the position as Sales Director. A computer and desk that all of your family uses would disqualify the deduction. If you have an area that does qualify, you need to determine its size relative to the rest of the home (ie. 5%, 10%). This would allow you deduct a like percentage of utilities (electricity, water, garbage, etc.) as well as allow you to depreciate this part of the home.

    The form that you would use is the 8821 (I think). The deduction gets entered as a misc. itemized deduction subject to 2% of your income. If your salary is relatively high, the tax benefit may be minimal if not non-existant.

    All that being said…..you should probably see a professional in your area.

    Edit:

    The workspace does not have to be the entire room. It can be part of the room. You would get a smaller deduction but it would help pass muster if you examined. Taking a deduction for the whole spare bedroom is a red flag….especially if there is a bed in there. A relative or friend spending one night there fails the exclusivity rule. There have been home office deductions disallowed because there were out of season clothes stored in the closet or a TV in the corner.

  4. upside down on June 2nd, 2009 12:29 pm

    PepsiLime is very correct on this. Here’s what I was told when completing my Form 2106:

    I could list any costs for the copier, ink, paper, etc
    my cell phone- if used strictly for business
    my fax line
    postage & shipping expenses used for work
    customer gifts & cards (must be under $25 each)
    1/2 of meals if I took a client to lunch
    unreimbursed mileage if I used my personal car to see clients, go to meetings, etc

    IRS website spells out everything you can and cannot do. Check there before you toss out any receipts this year!

  5. Tamira on June 5th, 2009 9:50 am

    TRUST ME YOU CAN WRITE OFF MORE THAN JUST YOUR PHONE, AND INTERNET. UTILITIES YES. AND ALSO DEPENDING ON THE SQUARE FOOT OF YOUR HOME OFFICE, YOU CAN WRITE THAT OFF ALSO. IF YOU DRIVE BACK AND FORTH YOU CAN WRITE OFF MILEAGE. IF YOU BOUGHT A COMPUTER, PENCILS, ETC. FOR DOING BUSINESS AT HOME YOU CAN WRITE THAT OFF. OFFICE MEETING LUNCHES. AND MUCH MORE! ALL THIS WOULD CARRIED ON YOUR SCHEDULE C OR SCHEDULE A (DEPENDING…). REMEMBER AUGUST 15TH IS THE LAST DAY TO FILE IF YOU FILED FOR AN EXTENSION. GOOD LUCK.