Q. I have an apartment in Maryland in which I use half of the 2nd bedroom (converted to an office) for my graphic design business. The second half of the room contains my husband's things. Can I take a home office deduction? I use my part of the room exclusively for business. Basically, I just have a desk and a computer on my side of the room. I also was wondering if I did take the home office deduction, can you also deduct gas and electric according to the percentage of the apartment you are using for business?
A. If you use the portion of the room regularly and exclusively for business then you would qualify for the home office deduction. You don't have to formally partition off that side of the room. So don't go buy some portable wall or decorative partition, because that is not required. As long as it is functionally separate and exclusive, you don't have to have it physically separated.
The indirect expenses, such as the electricity, gas, and other utilities will be partially deductible and would be included on the home office deduction form. You will use IRS form 8829, Home Office Deduction, to include all of your expenses and to calculate the deduction. You can download the form for free from the IRS website at www.irs.gov.