The IRS is more likely to audit your for home-office deductions
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A recent analysis of American commuting habits confirms what many weary workers already know: Commutes are getting longer. More Americans than ever are leaving home at 5 a.m. to 6:30 a.m. to beat the traffic. The number of workers who drive more than an hour to work rose more than 50 percent from 1990 to 2000, a study released last month by the Transportation Research Board found. One way to escape gridlock is to work from home. You’ll get more sleep, and you may be eligible for some tax breaks. The home-office deduction lets you deduct a portion of your mortgage interest or rent, utilities, insurance and even repairs to your home. |
People who work from home because their employers don’t want to provide them with office space are eligible to deduct some of their home-office expenses. If your employer does provide you with an office or a cubicle, you don’t qualify, even if you work from home most of the time, says Keith Stanton, an enrolled agent in Nashville. Once you’ve established that you’re eligible for the deduction, you’ve got another hurdle to clear. Your home-office expenses are categorized as miscellaneous expenses on Schedule A of Form 1040. Those expenses must exceed 2 percent of your adjusted gross income (AGI) before you can deduct them, says Mark Luscombe, tax analyst for tax publisher CCH.
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