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FAQ – What If I do Business Outside of My Home Office?

If you read our last post, you know that in order for a home office to be claimed on taxes, it must be used exclusively and regularly for business use. However, that doesn’t mean it has to be the one and only place you do business. Here’s how to keep your home office status as an entrepreneur and still be able to conduct business where you need to.

You can still claim a home office if any of the following apply:

  • Other people conduct administrative or management activities for your business at their business location. Ex: Your accountant does your small business bookkeeping from their office.
  • You conduct administrative or management activities at places that aren’t fixed locations of the business, like in a car or a hotel room.
  • You conduct a substantial amount of these non-administrative and non-management business activities at a fixed location outside your home, like meeting clients for lunch or traveling to conferences.
  • You have suitable space to conduct administrative or management activities outside your home, like at your regular business office. However, you choose to use the home office for those activities.

If you own multiple businesses and work on them both at home AND at an office:

  • Follow IRS guidelines to find out if your home office is the principal place of business for each. It might be for one and not the other.
  • A home office might be the main place of business for more than one activity. However, each activity you conducted in the office must meet all requirements for the deduction. Otherwise, you won’t meet the exclusive-use test for any activity.

Essentially, your home office doesn’t have to be the only place you do business. Your daily business activities as an entrepreneur will undoubtedly take you further than the walls of your home. However, the regular and exclusive use guidelines are most important when determining if your home office is tax deductible.

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