@Auser2 said"
What if I’m self-employed, I want to write utilities off for myself, I reimburse the person I’m living with for the expense- do they then have to count it as income? Would it be different if I paid the bills directly?
First, in order to take the home office deduction, you must have a space that is used 'Regularly and Exclusively' for business. Then you would need to identify those expenses attributable to that use. The usual method is percentage of space. If you able to meet the regular and exclusive rules, and able to calculate your business use percentage, your roommate would not have to declare any any income just because you are able to claim a portion your (normally) personal expenses as a business deduction.
It would not be different if you paid the bills directly. You still need to be able to reasonably calculate your business use.
Instead of all that detailed calculation: Filers can now determine their allowable home office deduction by multiplying the square footage of the portion of their residence allocated for business purposes (regular & exclusive space) by $5.00 up to a maximum 300 square feet ($1,500) for the taxable year starting January 1, 2013; the simplified rule. http://www.inc.com/samuel-wagreich/an-easier-way-to-do-2013-home-office-tax-deductions.html
