Thursday, June 17, 2010
The Home Studio – my final entry for Tax Deductable Business Expenses
The home office or studio deduction has been one of contention for some time but it is really quite straight forward. To take the deduction you must use your studio exclusively for your business. It doesn’t have to be an entire room but the square footage that you use to calculate your deduction must be partitioned and used exclusively business. That is, if you have a 300 square foot family room and you partition half of the space for your studio, the deduction calculation will be based on 150 square feet. If you have a 2000 square foot home you will deduct 7.5% of home related expenses on Form 8829 (Expenses for Business Use of Your Home). Uses of the room in addition to studio space might include storage of artwork and supplies or office space for record keeping and other business expenses. The costs that you could deduct might include rent, mortgage interest, real estate taxes, condo fees, utilities, insurance, repairs, etc. If your studio qualifies, this can be a powerful deduction for your business.