Office-in-home Deduction for Overseas Missionary

Question:

I am a missionary overseas. I do not have an office at church, but I use a portion of my home as an office. What are the requirements for an Office in Home deduction?

Answer:

A home office qualifies for a deduction if the space is used “exclusively and regularly as your principal place of business” according to IRS Publication 587. In order to fulfill the exclusive use test, the office area must be limited to a separate and recognizable area that is limited only by business use. For example, if your wife and children use a desk in the corner of the living room for homeschooling and you use the same desk for ministry work, the entire living room office space is disqualified from the deduction since you partake in both personal and business use in the area. In order to fulfill the regular use test, the office space must be used on a consistent, regular basis. If the space is used only occasionally, it is disqualified from the deduction.

However, if the desk and additional office furniture, e.g., filing cabinet, is in the corner of your bedroom, and that area is used regularly and exclusively for ministry purposes, that area of your bedroom is deductible as a home office—however small the area truly is!

For further information on qualified home office deductions, refer to our prior blog postings:

Missionary Business Use of Home

“Exclusive Use Test” – Business Us of Home Deduction by a Minister Missionary

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MinistryCPA - Corey A. Pfaffe, CPA, LLC

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