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	New Home Office Rules Financial Tip of the Week by Deloitte & Touche OnLine March 20, 2000

Work at home? The rules on tax deductions have been liberalized.

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Beginning with the 1999 tax year, a home office qualifies as a principal place of business if (1) it is used by the taxpayer to conduct administrative or management activities of a trade or business, and (2) there is no other fixed location of the trade or business at which the taxpayer conducts substantial administrative or management activities. The other requirements of the home office deduction rules would continue to apply, including the requirement of exclusive and regular use and, in the case of employees, the "convenience of the employer" rule.

Example: A doctor who consults with her patients at various local hospitals would be able to claim a home office deduction for a portion of her home that is exclusively and regularly used to conduct her administrative or management activities of her trade or business. If she is an employee, the use of the home would have to be for the convenience of her employer. Additionally, she could not conduct any other significant administrative or management functions at another fixed location.

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