Can I claim a home office deduction on my downpayment when buying my first house?

Great questions about home office deductions! I can help clarify this for you. For your first question: No, you cannot deduct any portion of your downpayment as a home office expense. The downpayment is considered part of the capital investment in your home, not an operating expense. It becomes part of your home's basis for calculating gains/losses when you eventually sell. Regarding your mortgage question: When claiming a home office deduction, you can only deduct the office percentage of the mortgage INTEREST, not the principal. So if your office takes up 10% of your home's square footage, you could deduct 10% of the mortgage interest you pay. The principal portion of your mortgage payment is never deductible as it's essentially you building equity. Remember that for the home office deduction to be valid, the space must be used regularly and exclusively for business purposes. A guest bedroom that occasionally serves as an office doesn't qualify.

After struggling with similar home office deduction questions when I bought my first home, I found a really helpful tool at https://taxr.ai that analyzes your specific situation and provides clarity on exactly what you can deduct. It helped me understand what expenses qualify and how to properly calculate my deductions. I was confused about whether I could deduct part of my closing costs related to my office space, and the tool walked me through everything, explaining which portions were deductible immediately and which had to be depreciated. Saved me a ton of research time!

Just wanted to follow up about my experience with taxr.ai after trying it. I was really surprised by how comprehensive it was! I discovered several deductions related to my home office that I had completely missed, especially around some of the closing costs that were partially deductible for my business. The tool actually confirmed that downpayments aren't directly deductible, but it helped me understand how my home office affects the depreciation calculation on my tax return. I ended up saving about $1,800 on my taxes that I would have missed otherwise because I didn't understand how to properly calculate the business percentage of certain expenses. It also created a really clear report I could give my accountant that laid everything out perfectly. Definitely worth checking out if you're planning to buy a home and use part of it for business.

For anyone dealing with complex home office questions, I highly recommend using Claimyr (https://claimyr.com) to get direct answers from the IRS. I used it after getting totally conflicting advice about home office deductions. I spent weeks trying to reach the IRS directly with no luck - constant busy signals or being on hold for hours. Claimyr got me connected to an actual IRS agent in under 45 minutes! The agent walked me through exactly how home office deductions work with mortgage interest and principal. You can see how it works here: https://youtu.be/_kiP6q8DX5c Honestly was a game-changer for getting my specific questions answered with confidence.

I have to eat my words about Claimyr. After my skeptical comment, I decided to try it myself since I had some questions about home office deductions I couldn't find clear answers to online. It actually worked! Got connected to an IRS representative in about 35 minutes when I had previously spent HOURS trying to get through myself with no success. The agent confirmed exactly what I needed to know about home office deductions related to my mortgage. For anyone wondering: they confirmed you CAN'T deduct any portion of your downpayment, but they gave me the exact percentage of my mortgage interest, property taxes, and utilities I could claim based on my office square footage. They also explained which closing costs could be partially deducted in the year of purchase versus added to the basis for depreciation. Seriously impressed with how well it worked after being so doubtful.

One thing nobody has mentioned yet - if you're self-employed and plan to use the regular method (not simplified) for home office deduction, make sure you keep meticulous records of all home-related expenses. I learned this the hard way after an audit. You'll need to track utility bills, maintenance costs, insurance, etc., and calculate the business percentage for each. It's also smart to take photos of your office space showing it's used exclusively for business. The IRS can be particularly strict about home office claims.

Anyone know if mortgage insurance premium can also be partially deducted as part of home office expenses? I'm putting down less than 20% so I'll have PMI, and wondering if I can deduct the business percentage of that too.