While a large fraction of U.S. businesses are home-based, few small business owners take advantage of the home office tax deduction, Internal Revenue Service (IRS) statistics show.
Nearly six-in-ten new businesses, and more than half of established small businesses, are home-based, recent data from the Global Entrepreneurship Monitor, a representative survey of entrepreneurial activity, reveals.
Census data indicate that most of these home-based businesses are small non-employers, organized as sole proprietorships. IRS data reveal that only 14 percent of the 23.4 million sole proprietorship returns filed in 2011 – the latest year data are available – took the home office tax deduction.