Work At Home Experts

Work at Home Strategies often involve tax considerations.

Take for example this type of question, and accompanying answer, which recently appeared on the website of the National Association for the Self-Employed.

Someone wrote in and asked:

I have built an addition on my home, with cash, to use exclusively for my business which I conduct in the office (architecture). How do I deduct the cost of the addition as a business expense? 

Here’s the answer, as supplied on the National Association for the Self-Employed website:

This is a really hard question to answer in a simple email so I am going to give you a brief overview of what needs to happen and then refer you to the IRS publications. The publications will give you the “nuts and bolts” of what you need to do. If your addition is used exclusively for business and qualifies for the home office deduction, then you can deduct 100% of the direct costs associated with building your new office.

However, because your new office has a useful life of more than one year, you must depreciate the cost of it ratably over time. I recommend that you download IRS Publication 946: How to Depreciate Property and IRS Publication 587: Business Use of Your Home.

Readers, I just went to the site for IRS Publication 587 and took a screen capture of a diagram that sums up the IRS policy toward a business in your home:

(National Association for the Self-Employed)