There are two basic questions asked, when it comes to a home office. I am paraphrasing the two questions below, because the specific wording in the program can differ, depending on the specific situation.
- Percentage of ***TIME*** the space or room was used to conduct business - The answer to this one "MUST" be ONE HUNDRED PERCENT. Anything less, and you do not qualify to claim the home office. Now, you may only be in that home office one hour a week. But when you're using it, it's ONE HUNCRED PERCENT business use. That room or space is not used for anything else, *ever*. So if that room is used for anything other than business (such as to play games on the weekends when the daycare is not operating) then it's not 100% business use and does not qualify for the home office deduction.
- Percentage of *BUSINESS* conducted in that home office - This can be less than 100%. For example, as a self-employed computer consultant I conduct around 70-75% of my business on site at the client's location. The other 25-30% is conducted in my home office where I pay bills, order supplies and equipment, create and issue invoices, schedule jobs, etc.
