IRS requires that home to qualify as a principal place of business
Your home may be regarded as the principal place of business on the basis of the following factors:
o The relative importance of activities in each location, at home, where you conduct business.
o If the relative importance factor does not determine the principal place of business, you can also count time spent in each location, at home, where you conduct business.
The IRS also says that your home office can alsoqualifies as a principal place of business to deduct business expenses related to commercial use if you meet the following conditions:
o You can use it exclusively and regularly for administrative or management of your business.
Or you have no other fixed location where you conduct important business administration or management of your business.
You can have more than one place of business, including your home, for a single company. To qualify for the deduction for expensesbusiness use of home under the principal place of business test, the administration and management of this important activity must be done at home. All the facts and circumstances must be considered to determine what your home is considered the principal place of business.
According to IRS regulations, the following are some examples of
business administration or management:
No customer billing, clients or patients.
or Accountingand records.
or ordering supplies.
o Set a date.
or transmission of reports or orders in writing.
Some administrative or management activities can be carried out in other places, and do not disqualify your home office to be the principal place of business. Examples of activities that can be made to other sites are:
No. hire someone to perform some administrative tasks or other areas of your home. VeryCompanies hire someone else to do their payroll, and would not disqualify the home to be his principal place of business.
o You can perform some administrative or management activities outside the home in places that are not fixed locations, like a car or a hotel room. This allows you to do business while you're away.
Or, you may occasionally conduct minimal administrative or management activities at a fixed location outside your home. This must be rare.
Or she will conduct important activities of non-management directors or a fixed location outside the home. For example, some companies use a conference room outside the home to meet or provide services to clients or customers at a fixed location outside the home, provided they do not fit to house the principal place of business.
Please contact your tax professional for help with this and any otherissue tax. "See also IRS Pub. 587.
Jo Ann Joy, CEO
www.IndigoBusinessSolutions.net, Phone (602) 663-7007, Fax (602) 324-7582
For more information on these and other important business and legal advice, please visit our website at http://www.IndigoBusinessSolutions.net Copyright 2006. Indigo Business Solutions is a registered trademark.
The future of your business starts here.