Question

Jim operates a business out of his home. One room in his home is used for business and qualifies as a home office. Which of the following allocable expenditures can Jim use in computing his home office expense deduction?

a)Jim pays his housekeeper $25 a week to sweep, dust and straighten-up his office.
b)Jim's fire and casualty insurance premiums on his home are $800.

Answer 1

Jim can include the fire and casualty insurance premiums on his home as part of his home office expense deduction, but not the payment to his housekeeper.

Step-by-step explanation:

Jim can use his fire and casualty insurance premiums on his home as part of his home office expense deduction. However, he cannot include the payment to his housekeeper as an allocable expenditure for the home office expense deduction. The expense must be directly related to the maintenance and upkeep of the office space itself, and the housekeeper's duties are not specific to the office.