Tax preparer David Stone of Santa Clarita, Calif., remembers when he’d barely see one or two home-office deductions a year. Now, roughly 40 percent of his small-business clients file them and pick up big tax savings. “Sometimes I make them take it,” he says. What makes the deduction so juicy? All those write-offs–everything from plush carpeting to built-in bookcases to a percentage of the utility bills to a portion of the home itself, which can be depreciated.
The new, lower capital-gains tax rates make that write-off even better. Home offices still must be used exclusively for business, though, so be sure not to have the office double as a guest room and tempt the IRS to go back to its harsher ways.
