14 Jul Can Truck Drivers Claim Home Office Deduction?
As a truck driver, you may spend most of your time on the road and feel that your truck is your primary place of business. However, when you’re not traveling, you need a dedicated place to serve as your home base where you can organize receipts, update your bookkeeping, or conduct business calls. You may even need a home office where you can hold in-person meetings with clients.
If the costs of maintaining a home office is holding you back, it may help to know that you can claim a home office deduction if you qualify – reducing the amount of tax you have to pay.
What are the requirements to claim a deduction for my home office?
For your home office to qualify as a deduction, your home office needs to be your principal place of business. It needs to be a space or portion of your home dedicated to your business; therefore, setting up your laptop on the kitchen table does not qualify. You must use it for your trucking business functions regularly and exclusively.
To avoid any conflicts with the IRS, you can use a spare room or separate space in the house and claim it as your home office. You cannot use your bedroom, living room, or kitchen to claim home office deductions because these spaces are used for personal purposes. To pass the IRS “exclusive use” test, it may help to get a separate phone line and computer for your business operations.
Also, it’s essential to keep your home office expenses separate from personal home finances. Some supplies standard in truckers’ home offices include logbooks, clipboards, maps, notebooks, pens, and a stapler.
How do I compute a home office deduction?
If your home office qualifies for the deduction, you can deduct home-related expenses such as homeowner’s insurance, homeowner’s association fees, and mortgage insurance. Home office deductions also include utilities like electricity, phone, and internet.
Home office deductions depend on the amount of space your office takes up. It is determined by square footage. If you’re eligible to claim a home office deduction, there are two methods for computing; they are:
Simplified option – The IRS offers a streamlined option for home office deduction for taxpayers. This option is straightforward, stating that the deduction cannot exceed $1,500. The standard deduction is $5 per square foot, up to 300 square feet. Also, the deduction cannot exceed gross income from business use, and you can’t take a depreciation deduction.
Regular method – The regular method requires the homeowner to determine what percent of the home the office takes up. Generally, this is a better option for truckers who use up an entire room to conduct their business. The regular method also requires a list of the actual expenses of the home office, including utilities, repairs, insurance, mortgage (or rent) payment, and depreciation.