Are you part of the 44 million people that have a 30-second commute by working at home?  Statistics show that in 2005 nearly a third of the U.S. workforce regularly worked at home. Yet the IRS reports that less than one fourth of these at-home workers claim home office deductions.  This could be because many don’t meet the IRS’s strict criteria for claiming the home office deduction.  Still others may qualify but choose not to take the deduction because they think it may increase their chances for an audit.

There are plenty of stipulations in whether or not you qualify and many taxpayers are so confused by all the rules, they shy away from taking this deduction. In a nutshell there are several determining factors.

You can claim the deduction:

• If your home office is your principal place of work.
• The space is used exclusively for work.
• You telecommute for the convenience of your employer.
• You meet patients, clients or customers at home.

You can not claim the deduction if:

• You work from home occasionally.
• Your office doubles as a guestroom or a den.
• You telecommute for your own convenience.
• Your “business” is an unprofitable hobby.

If you meet the technical requirements of the tax law, you can deduct a percentage of many of the costs of running your home, such as utilities, rent, insurance, depreciation, mortgage interest, real estate taxes, and some casualty losses, repairs, and improvements (if and/as they relate to the part of the house you use for business).

The home office deduction is available to both renters and homeowners alike. It is available for office space and other areas you use for business in your home including a home studio, a workshop or a garage if you meet the IRS’s criteria. The IRS classifies your “home” as a dwelling you can cook and sleep in. This can be a house, condo or apartment unit, a mobile home or even a houseboat.

Tags: Deductions, Home Office Deductions, Taxes