How to Qualify for the Home-Office Tax Deduction

Who Qualifies?

Anyone who's self-employed and uses part of his or her home exclusively for business can take the deduction. The space must be your primary place of business, and you must use it exclusively and regularly for business. To be your "primary" place of business, the space must be used to meet clients, or for bookkeeping and administrative tasks.

The qualification most often questioned by the IRS is exclusivity. "If you get audited, they're going to be looking for evidence of personal activities," Mark Luscombe, principal federal tax analyst for CCH, the Riverwoods, Ill.-based publisher of the Standard Federal Tax Reporter. "You don't want to have a TV there, or a bunch of toys."

Many employees also qualify, but with a key restriction: The home office must be required by your employer, or be for your employer's convenience as opposed to your own. IRS publication 587 spells out the details.