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Big home office deductions in small space

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. I have a small apartment in a high-rent part of town. Can I qualify for home office deductions? S.J.D., Philadelphia

A. Yes, if you meet all the requirements. To qualify for home office deductions, you must use an area of the apartment “regularly and exclusively” as either your principal place of business or as a place you meet or deal with customers, clients or patients. If you’re an employee, the use must also be for your employer’s convenience. A recent Tax Court case shows that a city apartment dweller with a small business space can qualify under these rules. (Miller TC Summary Opinion 2014-74)

Tip: If you own the apartment, you may be eligible for a depreciation deduction.

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