I use a home office for my engineering consulting business. I moved from one house to another mid year. Are any of the moving expenses deductible? Perhaps a percentage of my moving expense for my home office furniture? How about the expenses involved with looking for / purchasing / renovating the new house to accommodate a suitable home office?
No. Moving expenses are not deductible. The expenses related to looking for or purchasing the home are also not deductible. Some of the costs of purchasing the home may be added to the cost basis to reduce capital gains in the future when you sell the home.
Renovations for the home office, however, may be deductible. It depends on the scope of the renovations. Costs that extend the useful life or increase the value of the property, like an addition for the home office, would be capitalized. This means they are added to the cost of the home and depreciated with the property. Smaller repairs, maintenance, or upgrades may be deductible. Direct expenses are those that apply to the home office portion of the home only and are 100% deductible. Indirect expenses are those that apply to the entire home and will be deductible based on the percentage of square feet allocated to the home office.