A home office deduction is something you, as a home based Internet Marketer and online business owner, could benefit from if you meet the right criteria. As an incentive, the Inland Revenue allows you certain tax relief when you work from a home-based office.

What this means is that if you able to qualify for this tax relief, you can reduce your tax bill accordingly and retain more of your business profits. Of course, because the Inland Revenue is very strict about who qualifies for a home office deduction, it's important to make sure that you meet the qualifying criteria.

IMPORTANT: The information in this article applies generally, but the rules in each country may vary. Be sure to check the website of your local tax office for more information

The business expenses that you claim for should be carefully reviewed and calculated so that the Inland Revenue perceives them as normal and not outside the realm of reason. Claiming too much in this area could result in a visit from the tax man and probably a time-consuming audit.

To qualify for a home office deduction you must have a room or specific area in your home solely dedicated to your online business, and you have to be able to prove that you work there at least some of the time. Your main business dealings should be done in that room or area including client meetings and administration.

When you calculate your tax bill, you should be able to reduce it by an amount that represents the electricity you used to operate your business. As a rough guide, to figure out the amount of electricity that is used by your business, simply divide the cost of the entire bill, by the number of rooms in your home.

Another method of calculation is to measure the square footage of your home and office and deduct the office size from the main house, in order to gauge correct percentage rates of payment.

It's possible that you could even be able to claim back some of your mortgage payments. A prudent step would be to obtain the services of an account who can advise you how to work out the appropriate amounts.

Additionally, business expenses can include repairs, maintenance and water bills. File and archive all of your bills so that, when it's time to calculate your tax relief, you can figure out the appropriate amount. Some expenses are not eligible, so be sure to take note of what you can and cannot claim back.

Your home office deduction can help your small online business survive. If you are operating a legitmate home business, you should definitely look into claiming back some of your expenses. Whether you are a home business owner working as a self-employed individual, or simply working for an employer out of a home office, you should take the time to find out if you are eligible for tax relief or other benefits.