A good place to start looking for an answer is the IRS and its publication titled "Business Use of the Home" - go to the IRS site publications section and look for Publication 587. While neither this publication nor the IRS site say much about telecommuting, this publication is the best source of information at least to start with. In general, the IRS has progressively tightened the rules on home office deductions in the last 5-8 years. The rules for who qualifies for a deduction, and the calculation for the amount of the deduction, both got tighter.

In general, it is difficult for most telecommuters to qualify for the home office deduction and even if they do, the rules about how to calculate its value are likely to keep you from getting any big tax savings.

Your best bet - especially since for the tax year 1999 there are new IRS rules that are SLIGHTLY more liberal - is to check with a qualified tax advisor or accountant who can guide you better. You can find a description of these home-office rule changes in the IRS summary of major changes to the tax laws.