If your home is your only business locaiton
If you work from home running your business (not as an employee of someone else), and you have no other business location, your home is your principle place of business.
If you have another business location
If you have several locations from which you do business, you cannot deduct the expenses for use of your home unless it is your principal place of business. To make this determination, the IRS looks at:
- The relative importance of the activities performed at each place where you conduct business, and
- The amount of time spent at each place where you conduct business.
- You use it exclusively and regularly for administrative or management activities of your trade or business
- You have no other fixed location where you conduct substantial administrative or management activities of your trade or business.
Your home business can also qualify for tax deductions if some of the administrative or management activities are carried on at other locations. For example:
- Someone else conducts administrative or management activities at another location; doing your billing at their office, for example.
- You conduct activities from other non-fixed locations such as your car or a hotel room.
- You occasionally conduct "minimal" administrative or management activities at a fixed location outside your home. (It is not clear what "minimal" means in this context.
- You conduct substantial non-administrative or non-management business activities outside your home; meeting clients, for example.
- You have access to another office outside your home, but you choose to use your home for business activities. (This is allowed only if you are self-employed and not an employee.)
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