If you use your home for business, you may be able to deduct expenses for the business use of your home whether you rent or own your home.

There are two methods that can be used to claim the home office deduction.

If you use the simplified option just multiply the allowable square footage of your office by a rate of $5. The maximum footage allowed is 300 square feet.

If you use the regular option, actual expenses must be calculated based on the percentage of your home devoted to business.  These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation.

Here are four tips that taxpayers need to know about the home office deduction:

1. Regular and Exclusive Use:  You must use a part of your home regularly and exclusively for business purposes. The part of your home used for business must also be:

• Your principal place of business, or
• A place where you meet clients or customers in the normal course of business, or
• A separate structure not attached to your home. Examples could include a garage or a studio.

2. Deduction Limited Based on Income: If your gross income from the business use of your home is less than your expenses, the deduction for some expenses may be limited.

3 . Reporting the Home Office Deduction as Self-Employed:  You can claim the home office deduction on Schedule C, Profit or Loss From Business. If you choose the regular method, use Form 8829, Expenses for Business Use of Your Home, to figure the amount you can deduct.

4. Reporting the Home Office Deduction as an Employee:  You must meet additional rules to claim the deduction if you are an employee. For example, your business use must also be for the convenience of your employer. If you qualify to take the home office deduction as an employee, you claim the deduction on Schedule A, Itemized Deductions.