I Work From Home, Does That Increase My Risk of an IRS Audit?

Q Dear Joe,

I work from home as a sales representative and have never taken a home office deduction since I’ve heard it may increase your audit risk. What do you advise your clients on this issue?

Carolyn in New Hope

A Carolyn,

As long as you qualify for the home office deduction I wouldn’t hesitate taking it. The home office needs to be:

  1. Your principal place of business.
  2. The home office needs to be used exclusively for your business.
  3. Regularly used for your trade or business to meet or deal with customers.
  4. If your employer provides you an office, you may not take a home office deduction.

Hope this gives you a better idea if a home office deduction is right for you.

Joe Rapacki, CPA

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