Good records can be key if the IRS challenges your right to deduct home-related business expenses. Maintain an appointment book in which you carefully note the name of the client or customer and the date and time of each meeting at your home. If your home isn't your principal place of business, and you don't meet clients or customers at home, you can deduct expenses for a separate, freestanding structure that you use regularly and exclusively for your business. This might be a studio or a converted garage or barn, for example. The structure doesn't have to be your principal place of business or a place where you meet patients, clients or customers.
Norm is a self-employed landscape architect.
He has his main office in a professional center near a shopping mall, but most weekends he works in his home office, which is located in a converted carriage house in his backyard. Since Norm uses the carriage house regularly and exclusively for his landscape architect work, it qualifies for the home office deduction. If you sell retail or wholesale products and you store inventory or samples at home, you can deduct expenses for the business use of your home. Second, you have to store the products in a particular placeyour garage, for example, or a closet or bedroom. It's OK to use the storage space for other purposes as well, as long as you regularly use it for inventory or samples.