Starting with the 1999 return, you can write off expenses for your home office if you're self employed, it's your only office, and you use the
space "exclusively and regularly" (that's IRS lingo) for "substantial administrative or management" tasks related to your work.

Believe it or not, this is an improvement: Previously, you could only   claim your home office if you performed your most important money-making
duties there (a doctor would have to see her patients there, for  example--paperwork alone wouldn't cut it). If you decide to take this  deduction, it's important that you meticulously document use of the
office.