SALT LAKE CITY — Thanks to the digital age, more and more people are working from home every year.

So it’s no surprise that we are often asked the questions: "Can I write off my home office expenses? How do I do it?"

Here is some information you need to help make that happen.

Requirements to qualify

If you want to write off your home office expenses on your taxes, you have to meet certain qualifications from the IRS. Part of your home must be used regularly and exclusively:

• as your principal place of business.
• as a meeting place for your customers, clients or patients.
• in any connection with your trade or business where the business portion of your home is a separate structure not attached to your home.

  So you need to have part of your home that is dedicated to work and not used for other non-work purposes, and you must use it regularly. Figuring the deduction

How much you can deduct for your home office will depend on several factors:

• How much space your office takes up.
• How much money your business makes.
• How much your home office expenses are.

  The IRS offers two different methods to calculate your home office expenses: regular and simplified. The regular method

For the regular method, you’ll need to calculate your actual home expenses for the year and divide them between business and personal. You need to include:

• Direct expenses: Expenses that are exclusively for your home office, such as office supplies.
• Indirect expenses:These are necessary expenses for maintaining the entire home, including your office, such as mortgage payments and utilities. You can write off 100 percent of your direct expenses, but you’ll need to calculate a portion of your indirect expenses based on the percentage of your home used for business. The IRS doesn’t specify how you calculate this percentage. Here are two common methods:

By rooms

If all the rooms in your house are roughly the same size, you can use this to calculate your home office percentage. If you have five rooms and your home office is one of them, then your home office applies to 20 percent of your indirect expenses.

By square footage

A more accurate way to determine your home office percentage is by square footage. Determine the square footage of your entire house and the square footage of your home office. Divide your home office size by your house size to calculate the percentage.

The simplified method

The regular method is complicated for some who might prefer an easier option. The simplified method involves multiplying the square footage of your home office by $5, a flat rate. The area you use to calculate the deduction is limited to 300-square feet.

We recommend calculating your expenses using both methods and then filing the best one for your needs.

The forms you need

If you’re self-employed, use the Form 8829, Expense For Business Use of Your Home, to figure your deduction. You’ll then put that number on Line 30 of Form 1040 Schedule C, Profit or Loss From Business.

If you’re an employee, you claim these deductions on Schedule A, Itemized Deductions. However, there are additional rules that affect your ability to qualify — for example, your telecommuting has to be for the convenience of the business you work for.

Visit the IRS website to see more information about qualifications and required forms.

Troy Martin is a shareholder at Cook Martin Poulson, a Utah Accounting Firm. He has a vast amount of experience in the following business sectors: medical, dental, manufacturing, retail, restaurants, construction, farming and ranching.

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