Think Twice Before Adding an Office – and Taking the Home Office Tax Deduction
Refinancing a Home
Think Twice Before Adding an Office and Taking the Home Office Tax Deduction
Adding on a home office may not only make good business or personal sense, it can also improve the value of your home. Plus, a home office can be deducted from your taxes if it is used specifically and solely for business purposes. Keep in mind, however, that if you deduct your home office space from your taxes, that space will not be exempt from capital gains tax when you sell the home. The capital gains exemption only applies to personal living space, not tax-advantaged space like a home office. If you hope to sell your home for significantly more than you paid, the money you save in taxes now may pale in comparison to the tax hit and complications you might face later.