Storage of tools is not one of the criteria for a home office. Storage is acceptable for inventory only.
There are two basic requirements for the taxpayer's home to qualify as a deduction:
- There must be exclusive use of a portion of the home for conducting business on a regular basis. For example, a taxpayer who uses an extra room to run their business can take a home office deduction only for that extra room so long as it is used both regularly and exclusively in the business.
- The home must be the taxpayer's principal place of business. A taxpayer can also meet this requirement if administrative or management activities are conducted at the home and there is no other location to perform these duties. Therefore, someone who conducts business outside of their home but also uses their home to conduct business may still qualify for a home office deduction.
You do not have to meet the exclusive use test if either of the following applies. • You use the part of your home in question for the storage of inventory or product samples . • You use the part of your home in question as a daycare facility (discussed later under Daycare Facility). Note. With the exception of these two uses, any portion of the home used for business purposes must meet the exclusive use test.
When determining the average monthly allowable square footage, you cannot take more than 300 square feet into account for any 1 month. Additionally, if your qualified business use was less than 15 days in a month, you must use -0- for that month.
