Thank you again for choosing Alison Tax & Advisory CPA for your tax services this year. I understand that every tax choice is important to run a business and appreciate the opportunity to advise you about the home office tax deduction.
A self-employer who works from home is eligible to take a home office tax deduction, if the requirements set out by the Internal Revenue Service under Section 280A(c)(1) are meet. The home office must be used on a regular and exclusive basis for business purposes in order to be eligible for the home office tax deduction. Section 280A(c)(1) defines the “regular use” of the home office as the part of the home that is used on a continuing basis to meet with clients. Section 280A(c)(1) further defines the “exclusive use” of the home office as the portion of the home that is used only for business purposes at all times. Once the IRS has determined the regular and exclusive use requirements have been meet a tax deduction is allowed for the use of the home office.
Based on the facts you have provided me, your home office space is used for personal and business purposes. Therefore, you do not meet the exclusive use requirement and are not eligible to claim a home office tax deduction. Although, the use of the room by your relatives is infrequent, the IRS defines this as a non-business use of the home office space. If you wish to claim a home office tax deduction in the future, you can set aside a portion of the home to be used