Dear Freelancewrite, I am wondering if I should take advantage of the home office tax deduction. Although I don't write full time, I did write enough articles for one magazine to send me a 1099, and I may owe taxes. I use a space exclusively for my freelance writing. Should I take the home office tax deduction? Do you recommend that part time writers take the home office tax deduction?
Dear Writer,
Although I am not a tax accountant, I do have some resources and past experiences to draw on. Of course, your tax accountant will be your best bet once you get down to decision time.
You've already covered the #1 question that will help you make this decision: you use a space exclusively for your writing.
The makers of Turbo Tax software (which my writing business uses to complete our filing) say that the biggest roadblock to getting the deduction is the exclusivity designation. Your office or space must be used exclusively for your writing endeavors, and the administrative management that goes with them.
Notice that I keep saying "space" as opposed to "room." That's because you don't need an entirely separate room in order to use the home office deduction. The IRS specifically says that the "space" you use must be used "only for trade or business" and that it "can be a room or other separately identifiable space. The space does not need to be marked off by a permanent partition." So, as long as your writing space is able to be identified as separate in some way (not necessarily meaning a wall and door), then you can use it for your home office deduction.
Do I recommend it, writer to writer? You bet I do! Look, you may likely owe taxes on your writing income. You're likely to follow the rules and policies that benefit the IRS, so why wouldn't you follow the rules and policies that benefit you, too?
Some may say that taking the home office deduction is liable to trigger an audit. I'm not sure that's true anymore, but if I keep all my ducks in a row, I'm not going to fear an audit.
The IRS has spelled out the policies on the home office deduction in this PDF. This publication is one of the most straight forward documents I've seen on this subject. You may also want to visit About's Guide to Small Business Information for more information on this and other deductions.
