There has been a lot of talk lately about whether we should take the home office deduction. I can tell you my position. My accountant advises me to take it. My home office clearly qualifies and she says we should take it. However, there have been those posting about this from both sides.

Here is a small sampling of what is being said:

This is from the Taxes Information Blog.

Plenty of people find themselves shaking in their boots when they consider whether or not to add that tax deduction of their home office to their tax return. After all, isn’t it an instant invitation to the Internal Revenue System to perform an audit?

Although this is commonly thought, it is not the case. If you know what you are doing with the deduction, then you can most definitely take advantage of it. The key is to be careful about what actually qualifies as a tax deduction.

Only use deductions that are strictly related to your business expenses. For example, if you are using your home phone for your business line, the IRS knows full well that you are probably getting calls that are personal as well. Instead, get a dedicated line for your business and claim that cost.

The fact is, few home offices cause an audit on the tax return in and of itself. Making unbelievable deductions can be a cause, though!

This is from Web Worker Daily.

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.

Why don’t more people deduct home office expenses? The WSJ identifies a number of reasons: the law is quite complex, requires extensive record-keeping, and is perceived to raise a person’s risk of being audited.

What might be the ultimate barrier for many home-based web workers, however, is the law’s requirement that, in order to deduct expenses for your home office, you use that part of the home exclusively as your principal place of business. Very few people use their home office only for work, even if it is their main place of business.

This law hasn’t kept up with the reality of work today. If you set up a comfortable home office with a nice computer, filing system, and workspace, you’ll probably do your personal work there — paying bills, for example. You might play games on the computer or use it for socializing too.

The law could allow a proration of time based on how the office is used; for example, allowing you to deduct 80% of costs if you spend 80% of the time in your office working. While this would add to the record-keeping burden, it would have the great benefit of allowing home-based businesses the opportunity to deduct actual expenses, just like other businesses can.

And this is from The Consumerist.

A home office can be a significant deduction and well worth it if you qualify—but don’t try to bend the rules. Either you qualify or you don’t. Wise Bread has a good post about home office deductions, including who qualifies for a home office deduction and also what expenses are deductible.

Before you decide to take it or leave it behind, discuss it with your accountant or CPA. I don’t do my own taxes and rely on a professional for such advice and you should too.