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Can You Write Off Your Apartment as Work from Home Expenses?

Can You Write Off Your Apartment as Work from Home Expenses?

home officeIf you work from home and have a small office space, you may qualify for tax deductions. According to TurboTax, this is how a home-office deduction works: If your rent is $2,000 a month, and your apartment is 1,000 square feet and you have converted a space of 5×5 square feet as your home office. Then based on the square footage ratio of 25 square feet, this means 2.5 percent of your monthly expenses are deductible against the net profit of your business. However, apartment deductions are more complicated than it seems.

The IRS has strict rules as to whether you have a qualified home office. These rules state you must have a space used exclusively for business purposes only. Meaning, if you have a dining room table that doubles as a conference table, you do not receive a deduction. In a city apartment, it’s hard to have a true home office. The government wants to see an exclusive home office with four walls and a door.

Studio apartments are unlikely to qualify for a home office. However, renters of studios may be able to obtain a minimal deduction. An example would be buying a wardrobe that opens into a home office. According to the Publication 587 of the IRS, “You have no other fixed location where you conduct substantial administrative or management activities of your trade or business.” In other words, you must not have an office available to you from your employer. You cannot deduct something just because you choose to work from home.

The good news, if you do qualify for this deduction, the government has made it simpler for you to deduct your home expenses. Read about the safe harbor method here. If your place of business has an actual office, you need to clarify that you officially work from home. Ask your employer to put it in writing. You also need to take pictures of your home office, just in case you are audited.

If claiming your place as a home office isn’t an option, there are additional ways to lower your utility bills and help say your money while you work from home! At CTBest Apartments, we offer a variety of plans in our Stamford, Branford and Norwalk complexes that could have home office spaces to qualify for tax deductions. Visit http://ctbestapts.com/ to see the options we have available or call or text Desiree at 203-223-1665 for more information.

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