You can claim a number of quite valuable tax deductions for a home office, but in order to do so it has to meet certain guidelines set by the IRS. For most the IRS will never come anywhere near their house, but in the event of an audit everything needs to be in order.

According to IRS rules your home office must be a part of your house that you use on a regular basis for the exclusive purpose of running a business. That means setting aside a room, or even a part of a room that is visibly set up as an office of some kind.  You must also be able to demonstrate that your home office is your principal place of business or at least that you regularly use it to meet with clients.

If you can meet these guidelines you can then claim part of the general expenses associated with your home such as utilities, rent, homeowners insurance, mortgage interest and even general repairs. For more information on IRS guidelines visit: http://www.irs.gov/newsroom/article/0,,id=108138,00.html

Even if your home office does not meet the IRS standards for “exclusive use” it may qualify as “regular use” and a portion may be tax deductible. In addition, there are various business expenses the self-employed can claim. These can include: Internet connection, a separate telephone line that you use for work, equipment (computer, fax, copier, etc.), basic supplies, office furniture, computer software,  Social Security taxes (1/2 of self-employed contributions), and health insurance premiums. Of course there are certain stipulations to qualify for deductions. Those operating a daycare out of their home or who are not self-employed but, a telecommuter also can benefit from certain deductions. Consult your tax professional and visit the IRS website for additional details.