Home Business Tax Deductions: Keep What You Earn

If you elect to work from home, the federal government is prepared to help you out by allowing you to deduct your home office expenses from your taxes. This is so whether you own your home or apartment or are a renter. Although this tax deduction is commonly called the home office deduction, it is not limited to home offices. You can also take it if, for example, you have a workshop or studio at home. Because some people claim that the home office deduction is an audit flag for the IRS, many self-employed people who may qualify for it are afraid to take it. Although taking the home office deduction might increase your chance of being audited, the chances are still relatively small. Also, you have nothing to fear from an audit if you're entitled to the deduction. However, if you intend to take the deduction, you should also make the effort to understand the requirements and set up your home office so as to satisfy them