Small business owners are adapting quickly to the world’s new norms. Whether it’s shifting business to online commerce or conducting meetings through Zoom, business owners, as always, have to think quickly to keep their business alive.
Also, more entrepreneurs are working from home offices instead of their brick-and-mortar headquarters. That may mean close contact with family members during the workday or squeezing into tight spaces at home while video conferencing. If this is your situation, keep in mind that you can take advantage of work-from-home tax deductions.
What qualifies for a deduction?
Along with no commute and flexibility, tax deductions are another benefit of working from home.
As a small business owner, you have to meet two basic requirements to qualify for the home office tax deduction:
- Regular and exclusive use — The space you use for your office must only be used for conducting business.
- Principal place of business — The home office has to be your primary place for regular administrative activities or responsibilities, such as billing customers, setting up appointments and keeping books and records for your company.
If you meet these requirements, you may be able to write off a number of expenses, including rent, utilities, repairs, maintenance and even real estate taxes. Before taking this route, however, it is always a good idea to consult with a business and tax law attorney.