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Lock down deduction for home security system

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in Small Business Tax,Small Business Tax Deduction Strategies

Suppose your main place of business is your principal residence and you store valuables in a home office or a separate structure.

Strategy: Install a home security system for the business part of the home. In that case, you can take a depreciation allowance for the system, as well as currently deducting maintenance and monitoring expenses.

If you install a home security system for the entire home—not just the business portion—you may still deduct part of these costs. The deduction, like utilities and homeowners’ insurance, is based on the business percentage of the home.

Can you argue that the full cost is deductible because you have to secure the entire home to protect your business interest? This is an aggressive approach that the IRS probably won’t buy.

Tip: The home security system is deductible on Form 8829, Expenses for Business Use of Your Home.

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