That's not what I said. I said the area has to be a designated business area. I can find the law later from the irs, but to reiterate the AREA, Not you house, has e to be a designated area. As is if I have a room that is MY OFFICE, I can deduct that square footage, but If I happen to do my paperwork in the kids playroom, that is not considered tax deductible.

I see where we got crossed. I meant the portion of the house being used has to be 100% business to deduct, not 100% of the house has to be business to deduct a portion. Thought I was clear enough

Regardless of how you say it your wrong. In Paul's example of 75 pct of his garage being used for work he can deduct 75 pct of the square footage of his garage

According to our CPA in Pa. you can deduct 1/5th of your household expenses for office space if you are a sole proprietor doing business from your residence.

Still, from My,understanding it has to be a DESIGNATED 75 percent of his garage. Not just all his stuff taking up 75 pct. Otherwise the peanut butter and marshmallows in my pantry are deductible space.

I have a spare bedroom that has been converted into an office. The square footage of this room is a percentage of the total square footage of the home. That percentage is used for tax deductions on taxes, insurance, utilities and internet service. I have been with my current CPA for 6 years who uses this formula as well as my previous one doing it the same way. Below is a link to the IRS website with links on how to calculate the deductions for home offices. Hope it helps.

http://www.irs.gov/publications/p587/ar02.html#en_US_2014_publink1000226294

It certainly does. Thanks for the posting, Mike.