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4 Tips For Notaries Claiming Home Office Tax Deductions

Updated 2-22-22 for 2021 tax year. April is fast approaching and Notaries want to get the most out of their 2021 tax returns. The Notary Bulletin asked Jackie Perlman, principal tax research analyst at The Tax Institute at H&R Block, for tips for those claiming a home office deduction for the 2021 tax year.

This is general information only, and every person’s tax situation can differ when it comes to general Notary tax tips and mileage deductions. If you have specific questions about your tax situation, contact the IRS or your tax advisor.

Reminder: Starting in 2018, the home office deduction is available only to self-employed taxpayers. The deduction cannot be claimed by employees because the overall deduction for employee business expenses is not available. Although many employees had to work from home in 2021 because of the pandemic, there are no changes to the law. That is, the itemized deduction for employee business expenses is still unavailable.

What are the most important steps Notaries should follow when claiming a home office deduction? 

In order to claim the deduction, your home office must be used regularly and exclusively for business purposes. You must designate either a separate room in the house or an area of a room that will be devoted solely to your trade or business.

There are some exceptions to the “exclusive” test for an area used to store inventory, for instance, and also for areas used for day care businesses.

A simplified “safe harbor” option allows you to deduct $5 per square foot to a maximum of 300 square feet (maximum deduction $1,500) without extensive recordkeeping. Extensive recordkeeping is not required for the safe harbor option, but the maximum $1,500 deduction is designated for a larger room (about 20' x 15'). If your home office is smaller, the deduction is smaller too.

What records should Notaries keep related to home office deductions?

The home office deduction allows you to claim as business expenses a portion of both deductible expenses, such as mortgage interest and real estate taxes, and otherwise nondeductible personal expenses including utilities, home insurance, repairs and depreciation. However, you must keep all statements and receipts to substantiate these claims.

Mortgage and real estate statements should be kept as deductible expenses, too.

Where is the home office deduction claimed?

Self-employed taxpayers report the expense on Schedule C, line 30. Taxpayers using the safe harbor method metnioned above can use a worksheet in the Schedule C instructions to calculate the deduction. Those not using the safe harbor must also complete Form 8829, Expenses for Business Use of Your Home, to calculate the deduction.  

How will recent tax law changes impact self-employed taxpayers with a home office deduction?

There are no specific changes to the home office deduction, but extender legislation that passed at the end of 2020 could indirectly affect the deduction for 2021.

Specifically, the deduction for mortgage insurance premiums (including private mortgage insurance or “PMI” had expired at the end of 2020. Congress has extended this deduction for 2021.

The change could affect Notaries who calculate the actual home office deduction (i.e. do not use the safe harbor method). It means that the portion of mortgage interest allocated to the home office deduction may increase and thus the deduction may increase as well.

The American Rescue Plan Act extended other benefits available to self-employed taxpayers into 2021, such as equivalent credits for paid sick and family leave. For other 2021 changes affecting self-employed taxpayers see the “What’s new?” section of the Schedule C instructions. Since taxes change year-over-year consider using a tax professional experienced in small business returns.

David Thun is an Associate Editor at the National Notary Association.

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Judy Taylor

28 Feb 2016

What about miles driven? If I have a permanent notary sign in my car window with my phone number, am I allowed to claim all the mileage in my state as advertising?

National Notary Association

29 Feb 2016

Hello. For more information about claiming mileage deductions, please see our article "A Notary's Guide For Claiming Mileage Deductions At Tax Time":

Chuck Alexander

12 Mar 2018

Thank You for lnformtion on Notary tax credit.


10 Feb 2020

Can you claim a home office deduction if you are working from home meet all the requirements but are renting not buying?

National Notary Association

11 Feb 2020

Hello. You would need to contact a tax professional or the IRS to answer this question.

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