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Can you claim a home office deduction for business use?

You might be able to claim a deduction for the business use of a home office. If you qualify, you can deduct a portion of expenses, including rent or mortgage interest, depreciation, utilities, insurance, and repairs. The exact amount that can be deducted depends on how much of your home is used for business.

Basic rules for claiming deductions

The part of your home claimed for business use must be used:

  • Exclusively and regularly as your principal place of business,
  • As a place where you meet or deal with patients, clients, or customers in the normal course of business,
  • In connection with your trade or business in the case of a separate structure that’s not attached to your home, and
  • On a regular basis for the storage of inventory or samples.

A strict interpretation

The words “exclusively” and “regularly” are strictly interpreted by the IRS. Regularly means on a consistent basis. You can’t qualify a room in your home as an office if you use it only a couple of times a year to meet with customers. Exclusively means the specific area is used solely for business. The area can be a room or other separately identifiable space. A room that’s used for both business and personal purposes doesn’t meet the test.

The exclusive use rule doesn’t apply to a daycare facility in your home.

What if you’re audited?

Home office deductions can be an audit target. If you’re audited by the IRS, it shouldn’t result in additional taxes if you follow the rules, keep records of expenses and file an accurate, complete tax return. If you do have a home office, take pictures of the setup in case you sell the house or discontinue the use of the office while the tax return is still open to audit.

There are more rules than can be covered here. Contact your tax provider about how your business use of a home affects your tax situation now and in the future. Also be aware that deductions for a home office may affect the tax results when you eventually sell your home.

Learn more about GJM's expertise in business advisory and tax.

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Ohio International Market Access Grant for Exporters (IMAGE)

Overview
The Ohio International Market Access Grant for Exporters (IMAGE), funded by the state of Ohio and the U.S. Small Business Administration, is designed to increase exports and create jobs. The IMAGE grant offers financial assistance for small businesses to promote their products and services in international markets. The grant will provide a 50 percent reimbursement up to $10,000 per fiscal year for qualifying activities.

All eligible activities must be completed by September 30, 2015.

For Whom
The IMAGE program requires the application to be signed by a corporate officer, certifying that the following eligibility criteria will be met:

  • Company operates a licensed business in Ohio to manufacture, assemble and/or distribute a product or provide an exportable service.
  • Company certifies that the products to be promoted contain a majority of U.S. content. U.S. content is valued at export-works price minus the aggregate value contributed by foreign suppliers, including labor and material.
  • Company has identified qualifying and achievable export activities or initiatives requiring financial support.
  • Company asserts that it meets the requirements of the Table of Small Business Size Standardsset forth by the SBA.
  • Company has been in business for not less than the one-year period ending on the date on which assistance is provided under an IMAGE grant.
  • Company is operating profitably, based on operations in the United States from the firm's most recently completed fiscal year.
  • Company has taken the Export Questionnaire and achieved a score of at least 66, thus demonstrating an understanding of the costs associated with exporting and doing business with foreign purchasers, including the costs of freight forwarding, customs brokers, and packing and shipping.
  • Company has in effect a strategic plan for exporting, as outlined under "Client Commitments" on the IMAGE application.
  • Company attests that it shall not knowingly enter into any transactions with a person in the Excluded Parties List System
  • Eligible activities must be executed by direct employees of the company.
  • Nonprofits are not eligible.

Benefits
IMAGE funds will reimburse companies a maximum of $10,000* (50 percent on expenditures up to $20,000) for participation in the following activities:

  • International trade show exhibition: booth space rental and construction, freight costs to ship booth and materials and trade show registration fees. (Travel expenses and domestic trade shows are not eligible).
  • Approved trade missions listed on the IMAGE website: participant fees, market research and appointment setting fees, economy-class airfare in accordance with the Fly America Act , per-diem lodging. Travel expenses limited to two people.
  • Individual market visit supported by the state of Ohio in-country support, U.S. Commercial Service Gold Key Service or Food Export Market Builder: economy-class airfare in accordance with the Fly America Act, per-diem lodging. Travel expenses limited to two people. (Participation fees are not eligible)
  • International advertising: cost of production and placement of advertisements in magazines, newspapers, posters, billboards, direct mail, on TV, radio and international websites. (Printing costs are not eligible)
  • Translation services: website and marketing material translations and localizations, label and packaging translations and technical manual translations. (Printing costs are not eligible)
  • Global Target Program: Cleveland State University and University of Toledo.

The minimum IMAGE reimbursement amount is $1,000 (50 percent on expenditures of $2,000).

How to Apply

Launch the IMAGE Application

  • Grant applications must be pre-approved prior to commencement of activities
  • Grant awards are administered on a first-come, first-served basis and are contingent upon availability of funds.
  • Grant awards will be based on the overall quality of the export-related activity, as determined by the Ohio Development Services Agency
  • Grantees will not be compensated for activities also receiving funding through other sources (i.e., Food Export Association)
  • Grantees must be in good standing with all state of Ohio agencies, including the Department of Taxation.
  • Upon completion of the activities, grantees will be reimbursed upon submission of the materials noted in this document:

 

Contact Information:
Thien Bui
(614) 466-4996
IMAGE@development.ohio.gov