What Expenses Can I Deduct For My Home Based Business?

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A growing number of entrepreneurs manage their business from homefor the convenience and the cost savings. As such, the IRS has taken note ofthis and has scrutinized home office deductions.  Still, for those that have legitimateexpenses and maintain proper documentation, there are several deductions thatyou may be eligible to claim on your tax return.
What home business expenses can Ideduct?
In order to claim a home office deduction, you must regularly andexclusively use a portion of your home for your business (reference: IRSPublication 587).  Generally, you candeduct the business portion of these expenses: real-estate taxes, qualifiedmortgage-insurance premiums, deductible mortgage interest, rent, casualty loss,utilities, insurance, depreciation, security systems, and repairs.  You can also deduct expenses associated witha separate free-standing structure that you use exclusively and regularly forbusiness.
How do you calculate the businessportion of these expenses?You would divide the total amount of square feet used for businesspurposes by the total square footage of your home. For instance, if yourbusiness office was 500 square feet and your entire home was 1,000 square feet,you would be able to treat 500/1,000 or 50% of your rent expense as a businessexpense. Please note that the business must be up and running to treat thisexpense as business expense. Therefore, if you launched your business inSeptember, you could claim only the business expense from September onward.
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