I am a piano teacher and performing pianist. In past years, I taught at home. I have a room in my house that was used just for teaching or practicing and therefore could take a home office deduction. I now work for a university and no longer teach at home. But I still have income as a performer, and I still use that room for practicing on a regular basis. Can I still take a home office deduction even though my actual income is made on performances outside my house?
I understand the following in the basic IRS instructions:
There are two basic requirements for your home to qualify as a deduction: |
1. Regular and Exclusive Use. You must regularly use part of your home exclusively for conducting business. For example, if you use an extra bedroom to run your online business, you can take a home office deduction for the extra bedroom.
2. Principal Place of Your Business. You must show that you use your home as your principal place of business. If you conduct business at a location outside of your home, but also use your home substantially and regularly to conduct business, you may qualify for a home office deduction. For example, if you have in-person meetings with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business.
I qualify under requirement 1 - the room is used regularly and exclusively for my business. It is requirement 2 that is unclear for me.
For example, a graphic designer or computer programmer would do work in their home office that they are directly paid for. But in my case, I am paid specifically for performing, and the performance takes place outside my home. But in order to be able to perform, I must practice, and the practicing takes place exclusively in my home. This is a little different than the example of meeting with a client in your home, although you could argue that both of them involve the preparation work that needs to be done before you can be paid for your services.
If I do indeed meet requirement 2, then the question is what should I put in Part II of form 8829, in the Line 8 Calculation worksheet. The instructions state that you specify the percent of gross income that is from business use of the home. How do I calculate this? I spend MANY MANY more hours practicing at home than I do performing, but the payment is for the performance. Perhaps 99% of the time spent is for the preparation, not the performance itself.. So can I put 99% in that worksheet?