Can I claim a deduction for a studio apartment used as an office?

November 13, 2002

From:  Denice
Date:  Sat, 19 Oct 2002

Michael,

One year ago my husband's company turned their sales staff into virtual office employees. Thus, my husband must work out of our small home.

We need to move him out of the house. We only have one bedroom and a small child.

Can we rent a small studio apartment somewhere and deduct the cost of the rent as a business office given that he must have a place to work besides my kitchen table?

I searched the IRS web site but could only find answers on deducting a portion of our home, or deduction of rent for a small business or self employed individual. He is neither.

Where do we fall?

Denice

Answer

Date:  Fri, 01 Nov 2002

Hello Denice,

If your husband rents a separate apartment (office) that he uses exclusively for business purposes, you may claim an itemized deduction for the expenses as an employee business expense. Remember that miscellaneous itemized deductions, including employee business expenses, are reduced by 2% of adjusted gross income. It sounds like you might still have trouble getting a tax benefit for this expense, because you may not have enough itemized deductions to exceed the standard deduction. The standard deduction for 2002 for married persons filing a joint return is $7,850.

Good luck!
Mike Gray

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