By Kelly Phillips Erb | March 7, 2016
Apartments used for business can also qualify for IRS deductions, but make sure you know the rules and exceptions.
Some perks of working from your Los Angeles, CA, rental are obvious: You can write emails with soft music playing in the background, set your air conditioning to whatever makes you most comfortable, stay snug in your favorite sweats, and avoid rush-hour traffic on U.S. 101 at all costs. But one thing that work-from-home renters can miss out on (besides water cooler chitchat) is deducting their home-office space come tax time.
But the savvy renter knows this perk is not just for homeowners. Like homeowners who can qualify for tax breaks on home offices, renters may be able to claim the home-office deduction on their federal income taxes. Of course, when it comes to taxes, nothing is simple. Rules and exceptions still apply, so we’ve answered a few of the most common questions for renters who work from home, at least part of the time.
I do most of my work from my apartment. Does that count?
To qualify for the deduction, you must use your home — no matter how it’s defined — as your principal place of business. That doesn’t mean you can’t have more than one place of business; it simply means that you must use your home “substantially and regularly” (that’s the IRS criterion) for business. But that sounds subjective — and it is. Generally, if you meet clients at your home office as part of your normal course of business, you satisfy the rule. That’s true even if you also carry on business at another location, like a co-working space or your local Starbucks.
What else do you need to qualify for a home-office deduction?