If you operate a business from your home, then you may be able to write off part of your house. The general rule is that it:
- It is your main (principal) place of business
- You use the space only to earn your business income, and you use it on a regular and ongoing basis to meet your clients, customers, or patients
The expenses you can write off include:
- Utilities (heat, power, water)
- Mortgage interest
- Home insurance
- Property taxes
- Home phone
To determine the amount of the write off, you need to calculate the percentage that you use in your home.
First, determine your total square footage of your home.
Next, determine the approximate amount of square footage that you use for your business.
Next, calculate that percentage.
Finally, apply that percentage to your costs.
Below is an example of how this will work to home expenses.