The new home office deduction rules that become effective this year mean many people soon will deduct part of their rent or home depreciation, repairs, utilities, home insurance and security system.

To qualify for the deduction, your home office space generally must be used regularly and exclusively for business. For employees, it must be used for their employer's convenience. But if you own the operation, you must meet patients or customers there, or it must be your principal place of business.Up to now, the "principal place of business" requirement has been tough to meet. The courts said it meant where you spent most of your time or where you earned income. An example of a person who earned income there would be one who sells mostly by using a home phone or by mailing from home.

Under the new law you need not earn income at home. Administrative work qualifies if there is no other location where you can do it. This could include a house painter who spends much of his time at job sites and sales people who visit their customers' offices.

In the following two examples, assume the taxpayer uses her home office regularly and exclusively for business.

A young entrepreneur owns a small business a few miles from home. She went there every day to collect money and meet with employees and worked two hours a day in her home keeping books and performing other managerial tasks. This year, she can't deduct a portion of home expenses because she earned her income outside her home. But after Jan. 1, she can.

Dr. Sara Jones, a physician, does administrative work in her home office. She also maintains an office in a medical building where she treats patients and spends most of her time. She does no administrative work there, but her secretary does, maintaining patient records, scheduling appointments, billing patients. Next year, her home office qualifies because she performs no substantial administrative work at any other location.

Fortunately, a traveling salesman will not lose out simply because he also does administrative work in his car or hotel room. Congress said the fact that a person does some of this work at nonfixed locations will not prevent the taxpayer from claiming the deduction.

An often-overlooked deduction is available for people with a qualified home office.

You can deduct transportation costs between your home and other locations to conduct business. Without a qualified home office, this cost is considered a nondeductible commuting expense.

Warning, a home office deduction may trigger an audit, primarily because the law is shot full of complications and qualifiers. So follow the rules, keep good records and get ready for the new year by moving that sofa and TV out of your office before Jan. 1.