Self-employed people who use a portion of their home to conduct business are allowed to deduct certain expenses from their income taxes. You can deduct many items used in your home office, including a portion of the utilities, Internet service and cleaning supplies used for effectively running your business. Always keep up to date with any changes to the Internal Revenue Service tax codes to ensure the items you are deducting from your taxes comply with government regulations.
Determine your home office square footage by multiplying the room length and width. Divide your workspace area by your home’s total living area; this will determine the percentage of housing expenses, such as utilities, you will be able to deduct from your income taxes.
Keep the sales receipts pertaining to all equipment bought for your home office. You may deduct office equipment exclusively used for your business using the depreciation method set forth by the IRS or completely write off new equipment bought within the year.
Save receipts and invoices pertaining to utility, Internet service, equipment rental, cleaning supplies, office supply bills for your home. You will be allowed to deduct a portion or all of these expenses depending upon the exclusivity of their use for your business.
Fill out your income taxes according to the instructions provided by the IRS. Be sure to pick up the additional IRS Form 8829, Schedule C and Schedule A forms needed to write off your home office business expenses.
Be sure to read IRS Publication 587 to keep up to date with any changes to the home office deduction.
Have a tax professional handle your self-employment taxes if you have doubts about completing the forms on your own.
- A young woman holding a pen, doing her taxes image by Christopher Meder from Fotolia.com