The IRS keeps expanding the home office deduction. Currently, eligible space includes a room used to do business-related administrative work, but also a garage or barn workshop. The space must be used regularly and exclusively for a business purpose, but you can take the deduction even if you commute to an outside place of business every day.
The additional kicker this year is that, if you have a home office, you can claim other space you use in your basement, attic, or garage to store supplies, tools, or records, even if that space isn't used exclusively for work. Say you use 20% of your home space for your home office. That means 20% of all house costs -- including mortgage payments, repairs, taxes, utilities (not water), insurance, and depreciation -- are fully deductible. Even a renter can deduct a percentage of occupancy cost. --Howard Scott is a business writer and small business tax preparer in Pembroke, Mass.
