IRS offers new method for home office deductions

Working at home has come a long way from the days when employers were most concerned that they would not get their money’s worth if they allowed employees to do so. Instant communication, improved internet access, and more stable virtual network connections have changed the equation for employers, who now see the ability to work at home as benefiting both sides: employers and employees.

A deduction is permitted for expenses associated with that portion of the dwelling unit that is exclusively used on a regular basis either (1) as the principal place of business for any trade or business of the taxpayer; (2) as a place of business that is used by patients, clients, or customers in meeting or dealing with the taxpayer in the normal course of his or her trade or business; or (3) in the case of a separate structure that is not attached to the dwelling unit, in connection with the taxpayer’s trade or business.