Can I report home office expenses incurred on a business that I am reporting on my personal tax return?

Answer: House or apartment expenses related to a business are valid expenses. There is a special form on the tax return where these expenses must be included. Where there is a loss, these expenses will not help offset income earned from other sources, but excess expenses can be carried over to future years

Example: A taxpayer uses the second bedroom in her house to run a small business. The taxpayer uses the square footage of her office to allocate expenses. Her office is 100 square feet and her house in 1,000 square feet so 10% of house expenses can be used as a business expense.