Q&A: Home-Office Deduction for Orthodontist

Question

Bob, my client, wants to claim a home-office deduction. He is an orthodontist. His employees and contractors do the billing and accounting for his practice.

Bob and his wife (who is an employee) do payroll once a month in the home office.

Bob’s primary use of the home office is preparing treatment plans for his patients. My concern is whether the preparation of treatment plans is an administrative or a management activity. Can you give us your opinion?

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Answer

Sure. In fact, we’ll do that and a little more. Here are the answers to your question and some rules of the road for your client’s home-office deduction:

• Look at your client only. His staff does not impact his ability to claim a home-office deduction. In other words, the law doesn’t care what his staff does.
• To get this home office right, your client should consider doing all of his administration at home. He should make his practice office his patient office—nothing more, period.
• Preparing treatment plans meets the rules for administrative use of the home office.
• To know for certain that administrative use qualifies.
• Your client needs to meet the regular-use requirement.

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