As tax time rolls around again, people everywhere are looking to take advantage of every deduction they’re allowed. If you’re a homeowner, this means you’re probably researching and seeking out any potential deductions related to your property.
It would be truly nice if home security systems offered you tax relief in addition to peace of mind, but unfortunately, they’re listed as a nondeductible expense. That’s if your home only functions as a home, however. If your home is a home business, you may be able to deduct expenses related to securing and protecting that business — including home security tax deductions.
What Defines a Home Business?
Just because you answer a few work emails on your laptop while sitting in your living room doesn’t mean that you can call your house a home business and busily begin listing deductions. The IRS has a very specific list of requirements you must meet in order for your home to be considered a business.
The most important requirement is that your home must be used exclusively and regularly as your place of business. You need to actively utilize a place in your home to perform work. This requirement applies even if you work for an employer, as long as the work you’re conducting is at their request. Your home must be a place where you hold business, meet with your clients, visit with patients, or host customers regularly and exclusively.
The business portion of your home doesn’t have to be connected to the rest of the home structure or main residence. It can also be something like a detached garage or garage apartment. If you’re protecting that business with a home security system, you should be able to take advantage of home security tax deductions.
According to the IRS, the “exclusive use” reference means that “You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes.” They give the example of an attorney who uses their den to write legal briefs and prepare tax returns for clients. Because the family also uses the den for recreation, this violates the “exclusive use” requirement and means that the attorney would not be eligible for a home security deduction.
Other Home Businesses That Qualify
You can also qualify for a home security deduction if you use your home as a rental. If you sell products at retail or wholesale and keep the investors or product samples in your home, this qualifies the space as a home business as long as your home is the only fixed location of your business. Your home also qualifies as a home business if you use it as a daycare. It’s especially important to secure the home security deduction for ensuring that your home is properly protected if you work taking care of little ones all day!
Taking Advantage of Home Security Tax Deductions
The IRS has very detailed instructions on its website that you can reference to understand if your home business qualifies for a home security deduction (or can be categorized as a home business at all). The instructions also outline exactly how to go about filing for this deduction. As always, remember to check with your tax advisor.
Home security is important, and it’s even more essential when you’re protecting your assets and way of making a livelihood. Whether you have lots of expensive office and computer equipment, a garage or basement full of inventory, or spend your days entertaining, teaching, and watching out for dozens of little ones, make sure to get the proper tax deductions for taking the time to protect your home business.
At ProTech Security, we have a strong history of experience, innovation, and customer service. The ProTech Security Advantage is more than 30 years of service in Northeast Ohio and a strong commitment to providing quality, cost-effective protection for homes, businesses, educational institutions and government facilities. To see what ProTech Security can do for you, contact us today.