I have an office in my home in Texas. Is it true that I can deduct the percentage of my home that is used just for work from my whole rent? What percentage of my home utilities that are also used for work can I deduct? Would it be the same percentage as the rent?

ANSWER

The BIDaWIZ Team's Answer:

Yes, that is generally how you would calculate the home office deduction even if it's a rental apartment. The deduction is specifically allocated to the portion of the home that you regularly and exclusively use for your business (reference: IRS Publication 587). Generally, you can deduct the business portion of these expenses: real-estate taxes, qualified mortgage-insurance premiums, deductible mortgage interest, rent, casualty loss, utilities, insurance, depreciation, security systems, and repairs. You can also deduct expenses associated with a separate free-standing structure that you use exclusively and regularly for business. As for roommates, those areas wouldn't be incorporated in the calculation as it's not exclusively used for business purposes.