Expenses incurred from the operation of a business or the performance of employment-related activities within your residence. To be able to deduct home office expenses, an individual must spend at least half his or her time working at home. Individuals are entitled to deduct some housing expenses such as utilities, mortgage interest and property taxes. Anything that is used exclusively for the home office can be fully deducted, including supplies, an extra fax and phone line, and computer equipment. The amount of housing expenses that someone can deduct is restricted to the amount of business income they earn.