Every tax season in NYC, I hear rumors that it's possible to write off your monthly rent... Is that true?
Sort of. You may be able to write off part of your rent, but only under certain circumstances.
According to Kiplinger's Personal Finance, "You might be able to deduct your home office expenses if you do your freelance work from an office in your house." This personal finance column on their site states, "You must use an area of your home regularly and exclusively for business. The area must also be the principal location of your business or the place where you usually meet with clients. Your home office doesn't need to be a separate room, but it should be separated from the rest of your living space -- you can't take the deduction for your living room, for example, if you occasionally sit on the couch and work on your laptop." And for a little more light reading on the subject, including a flow chart of whether you can deduct a portion of your rent or mortgage, check out the 31 pages of IRS Publication 587. If you're self-employed and are unsure about how to maximize your deductions, you might want to consider hiring a professional to prepare your taxes - the benefits will probably outweigh the cost. Here's a handy About.com article on how to find a tax preparer.
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