Many clients that I work with have home offices and personal vehicles that they use for business purposes and there is often confusion as to what can be expensed to their business.

The following information regarding what you are able to expense to your business is found in IRS Publication 535.

Home Offices
You may be able to deduct expenses for using a portion of your home for business purposes. These expenses may include mortgage interest (or rent), insurance, utilities, repairs, and depreciation. 

To be able to claim those expenses you must:
- use the portion of your home (generally figured by the percentage of square feet that is dedicated to business use vs. total square feet) that you are claiming exclusively and regularly for administrative or management activities for your business, and
- that portion of your home must be either your principal place of business (i.e. you have no other fixed location where you conduct substantial administrative or management activities); or a place where you meet or deal with patients, clients, or customers in the normal course of your trade or business; or a separate structure (not attached to your home) used in connection with your trade or business.

If you are claiming a portion of your house that you are using regularly either for the storage of inventory or product samples, or as a daycare facility, then you generally do not need to meet the exclusivity test.

If you have more than one business location, your principle place of business is based on the following factors:
- the relative importance of the activities performed at each location, or
- consider the time spent at each location.

Personal Vehicles
If you use your car exclusively in your business, you are able to deduct all car expenses.
If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage.

Generally, commuting expenses between your home and your business location (if you are not running your business in your home) are not deductible.

You have the option to deduct actual car expenses, which include depreciation (or lease payments), gas and oil, tires, repairs, tune-ups, insurance, and registration fees.

Or, instead of figuring the business part of these actual expenses, you may be able to use the standard mileage rate to figure your deduction. For 2010, the standard mileage rate is 50 cents a mile for all business miles driven before January 1, 2011.

If you are self-employed, you can also deduct the business part of interest on your car loan, state and local personal property tax on the car, parking fees, and tolls, whether or not you claim the standard mileage rate.