If working at home is a condition of your employment and at the request, or for the convenience of the employer, tax deductions for all your work related expenses are allowed.

These deductions will be contingent on meeting specific criteria outlined by the Internal Revenue Service. (IRS)

All deduction criteria and contingencies will also apply to the self employed home business owner.

- Space -

* Your home workspace must be used exclusively for your job. You cannot set up a home office, work in it for eight hours, and then turn it over to your kids to do their homework, or even use it yourself to play games on the computer, or some other personal activity. The space cannot have a dual purpose of any kind.

* The home office space must be a contingency of your employment. Do you meet with clients or customers there? Even if you have workspace in another location and use the home office part time, as long as it is necessary to your job and used exclusively for employment related activity there is an allowable tax deduction.

- Other work related expenses -

Any work related expense not compensated by the employer is tax deductible within limits set by the IRS guidelines. Once you determine that your home office or workspace qualifies per government rules, measure the space and determine what percent of your home is being used exclusively and uncompensated by your employer's business. That percent is the deductible portion on the following expenses:

* Utilities
* Telephone (unless you have an exclusive business line; then the entire bill would eligible
for deduction)
* Internet service
* Mortgage payment of monthly rent
* Home insurance premium

- Miscellaneous expenses -

* Transportation expenses to and from appointments, meetings and any work related traveling that is not compensated by the employer.

* Equipment and supplies used exclusively for the purpose of conducting business. A computer that is not used for any other purpose, office furniture and equipment will all be eligible, within the limits of, and according to, IRS depreciation schedules.

Expenses deducted for working at home is one area scrutinized by the Internal Revenue and frequently the candidate for audit. The rules and guideline are complex and complicated to calculate. The best advice, if you have a home business, or are working at home for an employer, is to find a reliable tax accountant to do your quarterly and yearly tax returns.

Tax accountants are educated in the intricacies of tax law and are accustomed to working with the IRS and staying updated with the ever changing rules and guidelines. If you are audited, your accountant will do the initial explanatory paperwork and accompany you to any personal interviews. You can submit your tax forms worry free knowing competent support is available to you if needed regarding your work at home tax deductions.

Not only will you be in good stead with the Internal Revenue Service, as an added bonus, your accountant's fees will be tax deductible.

Learn more about this author, Carol Gioia.
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