How can you use IRS Form 8829 to deduct your expenses?

Sept. 3, 2010 - PRLog -- If you want to claim allowable expenses that you can deduct for the business use of your home then you need to fill IRS Form 8829.

If you want to deduct expenses related to the portion of your housed used for business purpose, then you have to meet the following tests.

You need to use specific area of your home to conduct business or trade and the same cannot be utilized for any other purpose. The area can be anything, for example, a store room or any other separately identifiable space. It is not necessary that the space is marked off by a partition.

The part of your home which you are using for business purpose must be the principal place of business, where you meet your clients and customers. You need to conduct all the management and administrative activities of your business in that marked place.

You cannot deduct the expenses that are allocated to tax exempt income. If you want to calculate deductions then you have to use square fee or any other similar method to measure the portion of your house which is utilized for business purpose. The direct as well as indirect expenses of the business use can be up to 100%.

In if any case your expenses are more than the current year’s limit then you can carry over the surplus amount to the next tax year. For more information, you should also read IRS publications.