Web Worker Daily

If you work from home, you may be wondering if you can deduct costs related to your home office — a part of your mortgage payment or rent, for example. But unfortunately the U.S. tax law in this area doesn’t recognize the work-life blend that most home workers practice. If you mix business and personal activities in your home office, you can’t take the deduction.

The Wall Street Journal reports that most people eligible for this potentially lucrative deduction probably don’t take it:

“It is questionable whether most taxpayers who are eligible to take the deduction actually do so,” IRS National Taxpayer Advocate Nina Olson said in a report to Congress last week. She urged lawmakers to offer taxpayers a simpler, optional method of calculating the home-office deduction. [subscription required]

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As more people work out of their home part- or full-time, they’re looking for offices or dedicated workspaces in their houses, according to The New York Times:

But by 2006, according to data collected by the Dieringer Research Group, a marketing research company in Brookfield, Wis., more than 28 million Americans were working from home at least part time — an increase of 10 percent from just the year before, and 40 percent from 2002. The American Home Furnishings Alliance reports that 7 in 10 Americans now have offices or designated workstations in their homes, a 112 percent increase since 2000. And a recent survey by the National Association of Home Builders found that home offices ranked as the fourth most important feature in a new upscale home, just ahead of security.

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