What, exactly, can I deduct?
If you pass the tests, then you can deduct all your direct expenses (i.e., money you spent to convert the space to business use), as well as a portion of the indirect expenses like rent, mortgage payments, real estate taxes, insurance, utilities, etc. To figure your deduction for indirect expenses, you normally figure what percentage of the square footage in your home is used for the business, then take that percentage of the indirect expenses as a deduction. So if you use 200 square feet of a 2,000 square-foot house for your home office, you could deduct 10% of all your indirect expenses. IRS form 8829 takes you through the calculations. (This form is available on the web; click here to select it from the IRS page of downloadable forms.)
>>Do I have to be concerned about zoning?
>>What if theres a problem with the zoning authorities?
>>Can I deduct my home office?
>>What are the IRS rules on home offices?
>>What, exactly, can I deduct?
>>What insurance will I need for my home business?
>>What if I want to open a day-care center?