The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: Telecommuting Deductions Date:  7/26/1999  2:05 PM
Author:  TaxService Number:  17671 of 127513

ave been working at home (telecommuting, but I work for GTE) for the last year and a half and I am considering revising my 1998 tax return to deduct the use of my home for work. I will also do this for 1999 but I will only be working at home from Jan - Aug. I am changing jobs at the end of Aug.

My question is: What can I safely deduct?

My home office is 90 sq ft, which represents 6.6% percent of my home. I can confidently say that this office area is only used for work purposes.

This is the list of deductions I think I can deduct, please add or subtract from this list: (PS> These are things I pay for myself)

6.6% of my mortgage (priciple only since the interest is already deducted)

6.6% of my utility bills (Gas, Electric, Water??)

6.6% of my Home Insurance??

Anything else? Any help would be greatly appreciated.

***The most important thing is to determine whether or not you qualify to take any deductions. The rules are modified for tax year's beginning after 1998. But, generally, the following holds true. If you do qualify, all expenses related to the business use percentage are deductible. 100% of the expense attributable to the space (repairs, etc.) is deductible as are furnishings, equipment, supply, etc.

***To deduct expenses related to the business use of part of your home, you must meet specific requirements. Even then, your deduction may be limited.

To qualify to claim expenses for the business use of your home, you must meet the following tests.

Your use of the business part of your home must be:
For your trade or business, AND
The business part of your home must be one of the following:
Your principal place of business,
A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or
A separate structure (not attached to your home) you use in connection with your trade or business.

Additional tests for employee use. If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. You must meet the tests discussed earlier plus:

Your business use must be for the convenience of your employer, and
You do not rent all or part of your home to your employer and use the rented portion to perform services as an employee.

Whether your home's business use is for your employer's convenience depends on all the facts and circumstances. However, business use is not considered to be for your employer's convenience merely because it is appropriate and helpful.

Definitions are more completely found at URL:

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us