Here are some things to consider when setting up a home office.

More and more Americans are establishing home offices, including most wholesalers , used car manager and other Used Car Professionals. There are important features that every home office should have. Most importantly, it should be private and as “separate” from the rest of the home as possible. In other words, when you are in your home office, the rest of the family members living in the home should give you the privacy needed to do your job. Most people who have achieved success in balancing their work and family life while working from home have created a separation that allows them to focus on their work while they are in their office, and focus on their family while they are in the rest of their home.

If your job requires phone work, use a landline. I know, I know. Landlines are so “old school”. Everyone loves their cell phone or smart phone, including me, I love my smart phone. I carry it with me wherever I go. I also conduct a lot of business on my cell phone. However, I still have a landline in my home office. In fact, many telecommuting companies REQUIRE a landline. The reason for this is simple, when your business reputation is on the line; no one wants a dropped call. Cell phones are great, but they still drop calls at a much higher percentage than landlines.

I have seen home offices that were extremely expensive to set-up, and I have seen very nice and immensely functional home offices that were created with virtually no money. Your office will obviously depend on your needs and your budget.

If you are short on funds, there are several things you can do to create a working environment that is right for you. For example, if you need furniture, buy used instead of new. Office furniture is very similar to exercise equipment. People buy these things; use them for a short period of time, then start hanging their laundry on them. Eventually people discard these items. Further, since a majority of new startups go out of business within the first year, there is always a large supply of used office furniture. Try looking in: Craigslist, Goodwill, or even yard sales. You will be amazed at the quantity of used office furniture that is available.

Lastly, and this might seem obvious, but, don’t purchase something until you have a need for it. When setting up offices, people have a tendency to rush out and buy things they “might” need. Some of these items, like a copier machine, can be rather expensive, so wait until you have an actual need before purchasing office equipment.

A home office will also count as a large tax deduction. The size of your tax reduction will depend on the size of your home office. A 1,000 square foot office will receive more of a refund than a 50 square foot office. However, there are several home office requirements that must be met in order for a home office to qualify for this tax break. One of the most important features is that the space designated as a home office must be used exclusively and regularly as the principle place of business, or it has to be a place used by clients, patients, or customers.

It has also been widely reported that claiming a home office deduction has always been a “red flag” for IRS audits. I think this has changed in recent years with more and more Americans working out of their house.

If you have further questions regarding the home office tax deduction you should consult your accountant.