With the economy on the rebound, the home office market could
potentially add nearly two million home-based businesses between
2011 and 2025, according to a survey by IDC, a market intelligence
firm. If you use your home as your place of business, claiming a
home office deduction has become significantly easier.
In the past, your only option to calculate the deduction was to
use the actual expense method. Using this method, you can deduct a
percentage of indirect home office expenses, including
mortgage interest, property taxes, association fees, home insurance
premiums, utilities (if you do not have a separate hookup),
security system costs and depreciation (generally over a 39-year
period). In addition you can deduct direct expenses,
including business-only phone and fax lines, utilities (if you have
a separate hookup), office supplies, painting, repairs and
depreciation on office furniture. In the past, this could only be
done by gathering up receipts and
