Part 4/11:
Many taxpayers claim a home office deduction to reduce taxable income, but the IRS is vigilant about proper documentation. Using a small part of your apartment or living space as an office can be legitimate, but overdoing it raises red flags.
Red flag: Claiming a significant portion of your living space as a dedicated office, especially if it doubles as a family or recreation area.
How to defend: Measure your dedicated workspace (e.g., 300 sq ft), take photos, and keep records showing exclusive use for work.