Home-business deduction and your taxes.

House Beautiful: Decorating with Sheets & Slipcovers It’s easy for [tag]taxpayer[/tag]s to deduct the cost of a [tag]home office[/tag]. To qualify for a [tag]deduction[/tag], the space must be used exclusively and on a regular basis for either the entire business or its administrative and management activities.

A home-office deduction is comprised mainly of depreciation, utilities and [tag]insurance[/tag]. For example, if a home has 2,500 square feet and the detached garage, now deemed “the office,” is 250 square feet, then 10 percent of the utilities and insurance are deductible. The actual office depreciation is 10 percent of what would be a [tag]depreciation[/tag] deduction if the entire home were being depreciated for tax purposes. (Depreciation is not allowed on a typical principal residence, so the square footage allotted to “residence” would not qualify.) Supplies and other expenses directly related to the home office are fully deductible.

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