Home Office Deduction
Even though you may maintain the business office in your home, you CANNOT rent the office to your Company. However, you CAN enter into an agreement with your Company to reimburse you for your office expenses including utilities, repairs, and even depreciation. We suggest you submit a request for reimbursement to your Company at least quarterly and have the Company pay the request as it would any third party bill. While qualifying for the home office deduction allows you to depreciate part of your home, this could have negative consequences when the residence is sold. Any depreciation claimed after May 6, 1997 must be recaptured at a maximum rate of 25%.