Tax Deductible for Rental Space

Question

I am going to rent a house, half of the space will use as workshop, can I use 1/2 of the rent for the tax deductible purpose?

Answer 1

You can take a Home Office deduction if this is your principal place of business.  Keep in mind that the Home Office deduction is a major audit flag with the IRS.

Answer 2

First you must itemize your deductions to be able to do so if you are taking this against w-2 earnings.  Secondly the workshop could be used in some enterprise that produces income such as a business .  If either of those are true you may be able to take the rent and some portion of any other expense associated with the workshop operation.

Answer 3

If that workshop is used in a business that generates income, and if it passes some tests, then yes, not only the rent but any other costs you incur for the space - such as utilities, renter's insurance.  But the space has to be used regularly and exclusively for that business that generates the income.