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I decided to set up office in my home rather than rent a space. I have a really small home <800 sq ' and use one of the 4 rooms as my office. Can I deduct part of my mortgage payment as business expense?

5 Thoughts on Is a portion of my mortgage deductible if I am 1/4 of my home as a business office?
  1. Reply
    March 18, 2012 at 12:29 am

    Check with an accountant….they should know how to assess that so you won’t be in trouble in a year or two.

  2. Reply
    v b
    March 18, 2012 at 1:28 am

    Not the mortgage payment, but part of the interest, utlities and depreciation (which gets recaptured when you sell).

    You must meet the full definition of a home office to qualify, see IRS pub 587.

  3. Reply
    March 18, 2012 at 1:56 am

    yes. you can write of the sq footage used for your office. plus (depending on your business, ask your account) you can write off anywhere from 10 to 15% of your utilty bills. i also write off my entire garage. its used for storage for my business. plus, you can either do milage or gas for your car.
    it also all depends on what kind of business you have (assumeing its legit, llc, inc) there are lots of ways to take full advantage of the tax laws. first…get a GOOD account, and one you can trust and get the most from. the tax software programs aren’t worth it, when you can spend $ 250 once a year, and get a huge return back. i do it every year!

    hope that helped

  4. Reply
    March 18, 2012 at 2:02 am

    Probably, but the IRS is VERY watchful of this kind of thing. Check with an accountant, and don’t lie to the IRS about it, because this kind of thing brings up red flags.

  5. Reply
    Patrick S
    March 18, 2012 at 2:50 am

    yes. It’s pretty complicated, so getting help is very important (any experienced tax preparer can do this). You need to have the square footage of the room you use as well as the total square footage of the house. You have to make sure the room is used “regularly” and “exclusively” for the business. Storage of stock is good, doing paperwork on the kitchen table is not. If the kids use the room to play video games, you can only use part of the room. IRS loves to audit these if the area seems large.
    Once you get the percentage, you can apply that percentage to lots of other things too, like utilities and repairs (like new roof). You can also depreciate part of the house as well (which you should do, since when you sell it you may have to pay taxes on the amount depreciated even if you do not take it). Hope this helps.

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