Is an In-Home Office Best for You?

Contributing Staff
Rich Women Sisterhood

Written by Sharon Cohen

Do you want an in-home or offsite location for your freelance or consulting business? Remember, just because you are working on your own does not mean that you must have a home office or even rent your own offsite office. There are alternatives, such as sharing office space with an associate, renting workspace, and having a second office at a long-term client’s facility. Consider these plusses and minuses about working from home to determine which is best for you.
Plusses
1) Lower Wardrobe Budget. Even if you see clients once or twice a week, you do not need as many business clothes. You can normally work in casual clothing, or even your pajamas.
Reduce Automobile Costs. The amount of gas and wear-and-tear on your business car will be minimized. If your clients are local, you may be able to get another year out of your old car.
2) Increase Time with Family. You can be home at crucial times for your children’s development and spend more quality and quantity time with your spouse.
3) Add Tax Write Offs. The total square footage of your office is compared to the home's total square footage to determine the percentage used for business purposes. All space and utility costs, such as rent, mortgage interest, and heat, may be charged to the business using this percentage for your deductions. For example, if your office is approximately one-eighth the size of your house, you can deduct one-eighth of the home’s electrical charges. You can also depreciate office equipment and deduct supplies and automobile costs. A home office may be a “red flag” with the IRS, so be careful to keep home and office costs entirely separate. And, keep every receipt you get for expenses.
4) Enhance Work-hour Flexibility. You do not have to punch a clock, so you can set your working hours around deadlines and appointments. If you are a night owl or early-morning riser, you can schedule your time accordingly.
Minuses
1) Mix Family and Business. Especially if your office is in an easily accessible part of the house, it may be difficult to keep your family away from your work. Children plan interruptions for when you are on the phone. Also, you have to be careful of distractions, such as completing that plumbing repair you put off last weekend or washing those dirty dishes in the sink.
2) Work too Much. On the other hand, you may put in too many hours, because the office calls out to you morning, noon and night. The telephone and fax ring and instant messaging pings day in and out. Clients call just when you are sitting down for dinner.
3) Lose Track of Time. You were going to get some fresh air, take a short walk, or go to the gym, but it is already 5:30 p.m. Where did the day go? You just worked through lunch and breaks without knowing it.
4) Get Lonely. Email, instant messaging and telephones are wonderful communication vehicles but they don’t take the place of office chats by the coffee machine or early morning catch-up. Depending on your type of business, you can go a week or more without seeing any work contacts. Also, did you ever try to brainstorm with a dog?