How to write off two home offices

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in Small Business Tax

Q: I run two sole proprietorships out of my house. Do I need to use separate rooms for each business if I want to claim home-office deductions? W.D., Smyrna, Ga.

A: No, you don't need to use separate rooms for each business. But whatever space you choose, you must use it "regularly and exclusively" for activities that will sustain the home-office deductions. For example, don't use your home office space to keep track of your personal investments. That would completely kill your home-office write-off. File a separate Form 8829 for each home business activity that you conduct as a sole proprietor. If you have multiple businesses, you must allocate your home-office expenses to separate Forms 8829 using some reasonable method, such as revenue or time spent.

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