To claim a home-office deduction, you must use a portion of your home exclusively for business. The meaning of the word “exclusively” (pretty much “only”) is explained in this article.

Learn how this IRS Revenue Procedure allows you to avoid taxes on the sale of a personal residence in which you had a home office or that you used as a rental property. The procedure lays out the methodology, which includes using the $250,000 ($500,000 if married) home-sale exclusion in unison with a 1031 tax-deferred exchange to avoid the taxes and enhance your deductions on the replacement home.

You might qualify for an office downtown, an office in your main home, and an office in your vacation home. Wow! Three offices. And tax law might make all three offices principal offices. (Of course, three principal offices is an oxymoron, but hey, this is tax law, so three principal offices is a true possibility.)

To prove and keep your home-office deduction, you must know what the courts accept as regular use, and then you must take the steps necessary to prove your regular use. The biggest failure of the home-office deduction is failure to prove regular use.

How does the owner of a corporation claim a tax deduction for an office in the home? Rental is not the best method. Deducting employee business expenses as miscellaneous itemized deductions is not the best method. The best method is to use an accountable plan, as you will learn in this article.

The home-office deduction requires exclusive business use of the residence area used as an office. Under this exclusive-use standard, how much and what types of personal use does the law allow?

Do you claim a home-office deduction? Do you have a garage (attached or detached) at your home? If so, you need to spend a few minutes with this article. You will learn when to include and exclude the garage when calculating your home-office space.

The IRS tax form for deducting the home office contains the gross-square-footage method and makes no mention of other permissible methods. This article shows you how the net-square-footage method works and why it is always superior to the gross method found on the IRS form.

What happens when you locate an office (home office or other office) in a duplex or apartment building? It’s possible that this location can produce tax-favored depreciation for the home office.

Local zoning laws might require a separate entrance for an office in the home, but this rule would not apply to the type of home office we recommend.

If you own rental properties, you don’t want the tax law to call the rentals an investment. Instead, you want the rental properties to qualify as a trade or business so that you achieve tax favored Section 1231 treatment and other tax breaks.

With one business use of the home office and no personal use, you qualify for the deduction. The second business use, employee use, and spouse use must equally qualify for the home-office deduction, or else.

You can keep records that reduce the chances of an IRS physical inspection of your office in the home.

Computers and programs like Quicken make it easier to track business and personal activities. Even so, there are rules of the road that you should follow to ensure the best results.

The woman in this audit learned how knowledge can turn what appears as a nightmare (an IRS audit) into a positive happening—meaning cash refunds for the year of the audit and subsequent years. As the old sayings goes, “knowledge is power.”

Learn the federal income tax rules on business mileage to increase vehicle deductions. The four questions and answers in this article give you a clear roadmap of the rules along with the strategies you need to pocket more cash from your business.

Show me the proof that I can have an office in my home when I have an office downtown! Have you ever wanted that proof? This article gives you the law, legislative history, and IRS authorization for the office in the home deduction.

If you operate one business with two operations in separate states, you need to know the rules to tax deduct overnight business travel between the two locations. You also need to know these tax deduction rules if you have two businesses in two states.

You may claim a tax deduction for the business portion of your home security system regardless of your qualification for the office in the home deduction.

This court case shows how an office in the home may have than one room that qualifies for deduction.

You may not claim a home office deduction when you rent your home office to your S corporation employer. Therefore, redo this arrangement by taking advantage of your employee status.

You do not need a tax deductible office in your home to deduct the cost of business furniture and equipment in your home

You may not deduct any home expenses when you rent office space to your employer. This is the law. However, you can avoid this law and get additional tax benefits by following our outline on how to deduct a home office for your corporation. Do it right and avoid a red flag.

You can deduct your home office, even if you have another office. We have proof from the tax law that makes it possible. See the details and do it right.

You can avoid the allowed and allowable double tax whammy with this important, and underutilized, tax law exception.

One taxpayer’s CPA is totally wrong about three things: deducting a home office for multiple offices, net square footage, and using the office for rental properties.

Purchase of a safe or file cabinet to protect business tax records is deductible, but only to the extent of business use.

The accountant who is telling you that you may not deduct a home office because you have an office outside the home is wrong. It makes no difference how adamant he is about this. He is wrong.

The taxpayer in this case relied on his lawyer, but that lawyer did not know the home-office rules. Then, the judge misapplied outdated rules to his home-office deduction, costing this taxpayer $7,000.

The IRS applies a recapture tax, even when no depreciation is claimed.

If you do not have a home office, you may not deduct things related to the home, like gas bills or homeowners’ insurance. However, the law allows you to deduct office assets that could produce tax benefits because they would not be considered part of a dwelling.

To deduct things in a home office, they must be used exclusively for business use. Not one minute can be personal use. Should you have a use that fails the exclusive business-use requirement, that one failed use disqualifies your home-office deduction.

The best strategy for this subscriber: do nothing. He is considering forming a corporation, but we think that will not help him with what he wants to do. Sometimes the best solutions are the easiest.

The best strategy for this subscriber: do nothing. He is considering forming a corporation, but we think that will not help him with what he wants to do. Sometimes the best solutions are the easiest.

Section 280A(c)(6) forbids the home-office deduction when you rent home-office space to your corporation. Whenever you have transactions with or your owned corporations, partnerships, and other entities, you face rules in the tax . As Gary and Delores Beecher recently , of the related-party rules produce harsh results.

The IRS puts out its audit manual every year. It not only contains information on how to audit, but also gives information on disallowing deductions. We dissected the audit manual and give you 11 audit-proofing tactics to ensure you get the deductions you deserve.

You have probably read that the home office increases your chances of IRS audit. We’ve read that, too, but we don’t believe it. Regardless, there are a few things you can do to make your home-office audit-proof.

If you operate your business as a corporation and claim the home-office deduction, you need to prove that you use the home office for the convenience of the employer, your corporation. You must pass the convenience-of-the-employer test whether or not you are having the corporation reimburse you for home-office expenses.

Revenue procedure 2007-16 allows you to make a change in depreciation after you sell, trade, or abandon property. The new procedures make some prior procedures obsolete and make revisions easier.

You cannot qualify for the home office deduction if you have two administrative offices, one at home and one at your other office. Also, the rules only apply to you, not your staff.

You need to know the rules to protect yourself not only from the IRS, but also from the courts. If you don’t take the proper position on your home-office deduction, neither the IRS nor the courts give consideration to the arguments you should have raised that would have won your deductions.

Claim the proper amount of depreciation on your home office to take advantage of the time value of money and avoid problems.

When you operate your business as a corporation, you claim the office-in-the-home deduction as an employee. The law requires that this employee use be for the convenience of the employer. Generally, you want the convenience of the employer reason in writing.

When you have your corporation reimburse your home office as an employee business expense, you treat the home as if you had claimed the office-in-the-home deduction personally.

The corporate reimbursement of the owner-employee for office-in-the-home expenses includes condo fees and mortgage payments.

When you start a new business activity or you do a business activity on the side, you must establish a profit motive. One easy way to demonstrate the profit motive is to show the time you spend on the activity. This taxpayer had no proof of time worked, so he looked suspicious to the court.

The corporate reimbursement to you, the employee, for the business use of your home office requires that you recognize the depreciation component of the reimbursement as if you had claimed the office in the home on your personal tax return.

A marketing activity in the administratively qualified home office does not destroy the office in the home deduction.

In 1935, the self-employment tax topped out at $60. In 2006, the first part of the self-employment tax tops out at $14,413, but the 2.9 percent Medicare part continues after that without limits. Good tax planning for the self-employment tax is like an annuity. It gives you monetary returns—year after year—every year you are in business. So, plan now and consider everything from choice of entity to hiring your children.

Learn the federal income tax rules on business mileage to increase vehicle deductions. The four questions and answers in this article give you a clear roadmap of the rules along with the strategies you need to pocket more cash from your business.

The IRS audit manual states: “If you rent all or part of your residence to your employer and use the rented portion when performing services for the employer, you cannot deduct home-office expenses attributable to the rental.” Thus, forget the rental to the corporation and use the corporate-reimbursement-to-the-employee strategy for maximum benefits.

This taxpayer had his CPA with him during the IRS audit of his tax return. When the home-office deduction came up, the CPA agreed with the IRS that this taxpayer did not qualify for the home-office deduction under Soliman—a Supreme Court case that lawmakers made obsolete in 1999 with enactment of a new law. Thank goodness this taxpayer was a subscriber to this newsletter and, because of that subscription, knew the rules on the home office.