How do I take a home office deduction?

Answers:0   |   LastUpdateAt:2012-08-05 08:43:48  

Asked at 2012-08-05 08:43:48
Here's my situation:

(1) I'm a small business owner. My sole source of income is my LLC, and I have about 7 clients. I have one client who makes me work on site, and they are about 30 miles away. One client is in my city but I only go on-site once or twice a week max. I do 80% of my work from home across most of my clients.

(2) I don't own a car, so when I travel to the client 30 miles away, I must rent a car, which is about $70/day. That adds up. I'd like to deduct that, but in order to do so, I must first visit a local client (which I can do) so that the trip from there is tax deductible, or I must make my office my "home office" so that I can deduct the trip from my home.

My E&O and General Liability insurance policy is attached to my home address. It's the only "physical address" I have. The business mailing address is a PO Box and the registered agent is in Delaware.

One main issue: My apartment is small! My rent is $1300/mo, but I live in a studio apartment, with probably less than 500 square feet of space. I use my kitchen table exclusively (and I mean exclusively... I never do anything except work here, and it's covered with my work stuff, like a fan, a scanner, etc.). Can I deduct that area as a home office? I'd probably only claim 10% of my rent, but then at least I would have my home defined as my place of work so that when I travel to a client, it is deductible from the second I leave my door...

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