Deductible Expenses for Home Business

[Michael16]

I recently started my own business as a self proprietor. I will be running this business from my home and recently made some upgrades to my home in order to accommodate my new business. Specifically, this includes installing a new dataport (ethernet line) in my work area (a requirement I would not have otherwise installed) and a permanent door to provide noise protection for work that requires a quiet space.

Are these home upgrades deductible as business expenses? Additionally, how do I determine if any part of my monthly mortgage (principal/interest) is deductible as part of this business, as I will be using a portion of my home for my business?

Thanks for any insight you might be able to share.

[Anonymous_]

See https://www.irs.gov/publications/p550#en_US_2021_publink100010075

See also https://turbotax.intuit.com/tax-tips/small-business-taxes/the-home-office-deduction/L1RZyYxzv

[Michael16]

The first link references tax treatment of investment income. Is there another publication for treatment of home businesses? How are capital improvements in the home for business such as those referenced (door installation, cabling) handled in the tax code?

[VolvoGirl · Accepted solution]

Here is some IRS reading material……

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business

http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses

http://www.irs.gov/pub/irs-pdf/p535.pdf

Publication 463 Travel, Gift, and Car Expenses

https://www.irs.gov/pub/irs-pdf/p463.pdf

How to depreciate property

Publication 946 (2021), How To Depreciate Property | Internal Revenue Service

[Anonymous_]

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@Michael16 wrote:

The first link references tax treatment of investment income. 

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Sorry, that link was intended for another thread.

@VolvoGirl's links are a good place to start, however.