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Tax Preparation online help - Home Office Expenses

A home office qualifies as the "principal place of business" if

  • the taxpayer uses the home office to conduct administrative or management activities of a trade or business, and
  • there is no other fixed location of trade or business but the home office where the taxpayer conducts substantial administrative or management activities of the trade or business.

Home office expenses deductions are also allowed for a home office if the taxpayer uses the home office exclusively on a regular basis as a place of business. If the taxpayer is also an employee, the tax payer can only deduct home office expenses if such exclusive use of the home office is for the employer's convenience. For example, the employer instructs the employee to use his or her home office to do business for the employer.

Claiming home office expenses - e.g. Computers

You may be able to claim an accelerated depreciation deduction and a Section 179 first-year expensing deduction for your home computer provided you use the computer over 50% of the time for business (in your work as an employee) and the computer was placed in your home for the convenience of your employer, as a condition of your employment, so that you can properly perform your duties as an employee. Your employer does not have to explicitly require you to buy the computer provided its purchase spares the employer the cost of providing suitable equipment with which to perform your job responsibilities.

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