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socrateaser, Lawyer
Category: Tax
Satisfied Customers: 38802
Experience:  Retired (mostly)
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If the lease on a larger home/ office is $3,500 (incl Utilities),

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If the lease on a larger home/ office is $3,500 (incl Utilities), and the 100% dedicated office space is 30% of the total sq footage - what is the current recommendation(s) regarding Home Office expense ??

In my opinion, a taxpayer is entitled to any deduction that he/she can prove with credible evidence. IRS field auditors are mostly interested in documentary and obvious visible evidence. If the auditor thinks something is amiss, then he/she will ask to observe the home office. And, if the taxpayer does not consent, the auditor will disallow the deduction for lack of evidence.

The point is that if an auditor were to come to your home, and it was obvious that 30% of the total square footage of the interior property is exclusively used as your principal place of business, because it is set up for office rather than personal use, then you can take a 30% deduction. Otherwise, you cannot, because if you get caught, your deduction will be disallowed -- and, if the same office was used in prior years, you could find yourself being audited for those prior years, as well.

Hope this helps.
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