How to Write Off Business Taxes for an Apartment
If you do business out of your apartment, whether as an employee, an independent contractor or a member of a business association, such as a partnership, you may qualify for the home office deduction. This deduction allows you to deduct certain expenses related to the maintenance of your home office from your taxable income on Form 1040. A number of restrictions apply, however, including the rule that your home office must be used exclusively for business purposes.
Other People Are Reading
Instructions
-
-
1
Download Form 1040, Schedule C of Form 1040 and Form 8829 from the IRS website (IRS.gov).
-
2
Complete the first 29 items of Schedule C of Form 1040 to calculate your business profit or loss.
-
-
3
Determine the total area of your apartment, and the area that you use exclusively for business purposes. Divide the area used for business purposes by the total area to arrive at the fraction of the total area of your apartment used exclusively for business purposes. If your entire apartment is used exclusively for business purposes, this number will be 1.00 Multiply by 100 and express this number as a percentage on Form 8829.
-
4
Figure your allowable deduction, starting with your business profit or loss from line 29 of Schedule C. Add allowable expenses from Form 8829, such as rent, casualty losses, real estate taxes and insurance associated with your apartment, and multiply the total by the fraction of the area of your apartment that is used exclusively for business purposes.
-
5
Add any excess home office deduction carried over from previous years to your allowable deduction.
-
6
Enter your allowable home office deduction, including any carryover, on line 30 of Schedule C. Complete Schedule C and Form 1040 as you normally do.
-
1
Tips & Warnings
The rules for home-based day care centers are slightly different from the rules for other types of businesses.
References
- Photo Credit Jupiterimages/Comstock/Getty Images
