Last summer's federal budget agreement included a major change for homebased businesses. Those who perform a good portion of their work away from home will now be able to take a home-office deduction, providing they meet two criteria:
1. The home must be used for administrative and management activities.
2. There can be no other fixed location for this business where substantial administrative and management activities are performed. Whatever proportion of nonadministrative and nonmanagerial work you do at another site is irrelevant.
"While the change doesn't go into effect until January 1, 1999," says Sherry Stringer, a CPA and partner in Jones & Co. Ltd. in Jonesboro, Arkansas, "I think there's a good chance the IRS will probably ease up on restrictions until the change is in place."
Jones & Co. Ltd., (870) 935-2871, http://www/jonescpa.com
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