While doing some research for a client project, I happened across this article from last year, and saved it for comment on my blog:
Slowdown may boost home-office deductions
The article anticipated that in the coming year, the number of people working from home and claiming the home office deduction would increase. Supposedly the slower economy was expected to make people more likely to work from home in order to make ends meet. I assume they mean unemployed people or part-time businesses on the side of regular jobs, because it takes a lot more dedication than simply wanting to make ends meet in order to make a home business suffice as the only source of income!
Since the article is a year old, I can't help but wonder if the IRS really saw the predicted increase in home office deductions.
I also found it interesting that the article claims the home office deduction is no longer a red flag for an audit. I've heard that before, but I've been somewhat reluctant to give any credence to it. I'd rather be safe than sorry; and besides, removing all personal items and activities from my office space would be too complicated, so I'm rather content not taking this deduction.
What about you though? Do you take the deduction, and do you think there's any truth to the statement that the home office deduction is a red flag for an audit?