SBA.com is an independently owned and operated website and has no government affiliation.

Work From Home

When considering developing a small business, either as a sole proprietorship, limited liability company or otherwise, it is important to consider if you should work from home. Whether or not your home office is successful may depend entirely on your work ethic, though there can be substantial savings when compared to leasing space outside the home. Conducting your business from home can seem like the easiest way to get started, but, as with as endeavor, it has its drawbacks as well.

Benefits

There are many advantages when you work from home:

  • Numerous costs can be cut by operating a business from home, ranging from the rental of office space to the cost of gas or public transportation associated with commuting to another place of work.
  • People who work from home save on childcare, and many enjoy the convenience of being able to make their own schedule rather than reporting to an office for a typical 9-to-5 job.
  • You can write off certain home expenses as business expenses, such as the cost of home office equipment, which is another money-saving advantage the work from home option provides.

Home Office Deduction

According to the Internal Revenue Service, you can qualify for the Home Office Deduction on your federal taxes if you “use part of your home exclusively and regularly:

  • as your principal place of business, or
  • as a place to meet or deal with patients, clients or customers in the normal course of your business, or
  • in any connection with your trade or business where the business portion of your home is a separate structure not attached to your home.”

It is important to note that this deduction is commonly claimed fraudulently. As such, the IRS is prone to pay close attention to this deduction in order to ensure it is being properly claimed, potentially resulting in an audit.

Can You Stay Productive on Your Own?

What is most important when considering whether or not to work from home is deciding whether or not productive work can be done in the home environment. For some, home provides an endless series of distractions. To be effective, the time spent working should be treated as if away from home at an office, away from those distractions. There are some ways to make sure that this can happen.

Have a Separate Office

If possible, having a separate home office within the home can remove distractions. Being in this separate room (or at the very least, a desk devoted primarily to work) creates the work mindset. It can also help people who work from home to avoid the feeling, in non-work hours spent in the home, of “always being at work.”

Set Aside Specific Work Hours

One of the benefits of a work from home job is flexibility of scheduling. Parents can be home when kids come home from school. Errands that typical full-time employees may have to skip work to perform, such as going to the post office or DMV, can be done at convenient times. In order to be productive when you work from home, setting aside specific hours dedicated to work is necessary.