Sitemaps
Questions
DiscussionsQuestionsExperts

Questions

Tax

If I get a virtual address for my company and I work from home; will I still be eligible for tax credit on my home office?

Answer This Question

4

Answers

JoAnn Fleming

Owner at Fleming & Associates CPA, PC

yes. As long as your main place of work is your home/office.

Answered over 9 years ago

Jason Knott

International Tax Attorney and U.S. CPA

Under U.S. tax rules, you are permitted to deduct the costs of your home office. The fee you pay for the virtual address is a deductible expense, similar to paying for a PO box.

If you work from home, the IRS will permit you to deduct an allocable share of the total home expenses. In order to qualify for the home office deduction, the room in your home needs to be used regularly and exclusively for business purposes.

The IRS provides two methods for computing the home office deduction. The first is the Simplified Method, which takes the square footage of your home office and multiplies it by a prescribed rate per square foot.

The second option is the Regular Method, which measures the actual expenses of the home. Divide the square footage of the home office by the total square footage of the house. Multiply the percentage by the total expenses of the home to arrive at the home office deduction. There are other rules that prohibit a home office deduction that exceeds revenue of the company, so you may have a carryover of expenses if they are not deductible in the current year.

Answered almost 5 years ago

Jeff Barnes

Best Selling Author, Financial Consultant

Yes, you will. Be sure you calculate your office space as a percentage of your total home square footage. You need to be sure you also use your office space only for work. I have had clients and friends who have had "surprise" IRS audits to verify that the home office was really only used for work.

Your personal tax return doesn't need to list your business' mailing address, so they won't question the difference in mailing vs. physical address.

Answered over 9 years ago