Home Office Qualifications

• To claim home office deductions, the IRS requires that the space used for a home office be used only for business purposes on a regular basis. Self-employed taxpayers may meet with patients, clients and customers in this space. The area cannot be used for personal activities, such as eating, homework or family time. However, the space does not need to be partitioned or separated from a larger room. Employees working from home must use the home office for the convenience of the employer without renting the space to the employer.
  
  

Classification

• The IRS classifies office desks as "property bought for business use" if purchased for use in a business. The desk may be new or used. The cost of the desk can be deducted using a section 179 deduction or by depreciating the cost over a period of time, with both methods using IRS Form 4562. If the desk was previously used for personal purposes by the business owner and later converted to business use, the IRS will not allow a section 179 deduction on the property.
  
  

Section 179 Deduction

• Section 179 allows businesses to deduct the full price of qualified business equipment on one specific year's taxes, instead of spreading the depreciation out over several years. All businesses that purchase business equipment and office furniture worth less than $2 million during 2011 qualify for section 179 deductions. For home offices, the IRS requires that all equipment be used more than 50 percent for business to be eligible for section 179 deduction.
  
  

Depreciation

• The IRS considers office furniture, including desks, chairs and filing cabinets, as seven-year property for deduction over eight years under the Modified Accelerated Cost Recovery System, also known as MARCS. The first year follows a half-year convention, which allows for the deduction of a half year of depreciation during the first year for most taxpayers. Those introducing 40 percent of the deducted property in service in the last three months of the year are allowed to use a mid-quarter convention in place of the half-year convention, according to IRS publication 587. The first year allows for a deduction of 14.29 percent of the property's value. The second year deduction is 24.49 percent. The deduction percentage reduces every year to a final deduction in the eighth year of 4.46 percent.