Tax Tips: Business use of home

[judas_priest]

The best thing to do is to go to the IRS publication on this topic: Publication 587. http://www.irs.gov/publications/p587...link1000226292

In partial answer to the question raised in a different thread, in order to be able to deduct mileage from your house to your first business stop of the day, you must have a legitimate home office. Since that for me now means several thousand miles a year, with a deduction of greater than $1,000 ($.51 per mile), I elected to do it. In order to qualify (it is my principal place of business but I do not meet customers there), I had to make sure the use was exclusive. This means I rearranged everything in the room I use as a home office. I moved everything that didn't have a specific business purpose from two shelves that are on the wall above my desk. I moved everything non-business from the two 2-drawer file pedestals that support the desk.

So as of now I have an 8 foot long area that is used exclusively for my tax business (Actually, it isn't very efficient, but having mounted those shelves to the wall, to adopt a more efficient arrangement I'd have to take them down and reinstall them. Then I'd have to empty the file pedestals so that I could move them and the desk, empty the other bookshelves that sit where I'd like to move my desk to, move those shelves, etc.. No thanks.

So I figure I segregate the five feet coming out from the wall, which gives me a forty square foot home office. The only real reason to do it (deducting 3% of my utility bills, insurance and .1% of the value of the structure for depreciation doesn't amount to much) is to be able to take that first trip of the day. (If I weren't being reimbursed for out of town travel it would really be a big deal).

I'll have more later on the specific question raised about the home office for medical sales.