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Set up your home office the right way


You'll gain hours and work in greater comfort, as long as you follow these basic rules.


Set up your home office the right way

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Choose article section... Can you deduct your home office?

You'll gain hours and work in greater comfort, as long as you follow these basic rules.

By Leslie Kane
Senior Editor

Mitchell Kahn, an internist in New York City, is tucking his daughter into bed when the local hospital emergency department calls. Instead of racing to his medical practice across town, Kahn pops into a corner of his bedroom that's outfitted with a computer. He connects with his office via modem, accesses records to check his patient's medications and history, discusses treatment with the ED doctor over the phone, faxes a copy of the patient's most recent ECG, and 10 minutes later, gets back to his family.

"I spend about 10 hours a week in my home office," says Kahn. "I return almost all my nonurgent calls from home. It's efficient, and lets me take better care of patients."

Daniel Sands, an internist in Boston, says of his home office, "I can connect to the hospital, check a patient's lab values, research clinical information on the Internet, write patient notes, fax reports, communicate with colleagues, and answer e-mails."

More and more doctors are connecting from home to handle both emergencies and routine practice administration. "Although some folks spend as much as $100,000, you can outfit a basic home office for under $4,000," says Neal Zimmerman, an architect in West Hartford, CT, and author of At Work At Home (The Taunton Press, 2001).

To create an effective home office, focus on these elements:

Furniture and lighting. If you have the room, set up two workstations—one for the computer and one for spreading out papers and writing notes, advises Zimmerman. If you're using a corner of a room, saving space is critical. Look into a desk unit that folds up and disappears from view.

Don't scrimp on the chair. "A $100 chair may superficially resemble a $1,000 one," Zimmerman says, "but they differ in the way they support you, tilt, and adjust." Herman Miller's Aeron ($599 - $899) and Steelcase's Leap ($799 - $1,399) are good choices.

Proper lighting is essential, too. "If you depend on artificial light, you should have ambient light, which provides a low level of illumination to a room, and a task light to shine on documents or notes," says Zimmerman. "If your overhead lighting is strong enough to illuminate the desk, it may create a reflective glow on the computer screen." Zimmerman recommends recessed ceiling lights with a dimmer.

Electronic equipment. Got an old computer? Get rid of it or upgrade if the processor's speed is under 200MHz; it has a hard drive under 10GB; or it has less than 64MB of RAM. The equipment won't be able to effectively run many of the programs you'd want.

"The higher speed processor you get, the longer you stave off obsolescence, so keep in mind how long you plan to own the computer," says Faithe Wempen, author of Set Up Your Home Office in a Weekend (Prima Publishing, 2000). "Most home office users should be happy with a 1GHz processor, 128MB of RAM, and a 40GB hard disc." Keep in mind, however, that voice recognition programs for dictation require 512MB to function well.

Your choices for Internet connection are phone modem, cable modem, DSL, or ISDN (Integrated Services Digital Network). A phone modem's the cheapest, but by far the slowest. You dial up your Internet server through a standard phone line. "If you spend much time on the computer, you'll want a separate line so that other family members can use the phone while you're on the Internet," says Wempen. Cable modems and DSL are always connected to the Internet, so you don't have to dial up; they're also much faster than phone modems, so you can upload and download very quickly.

With cable, the access comes through your television cable line. The downside is that it's not available in all areas. And, as more people in your neighborhood sign up for cable modem service, it can slow your speed during peak usage hours.

With DSL, the phone company splits one of your voice phone lines, sending Internet data at high frequencies and allowing you to use the lower frequencies for calls. "It tends to be a little more expensive than cable, but is available in both residential and commercial areas," says Wempen.

If you use a phone modem, an antivirus software program provides adequate security. "With cable modem or DSL, since the connection's always open, there's a bit more hacker exposure," says Wempen.

Stemming that exposure was critical to Lee A. Green, a family physician in Ann Arbor, MI, who set up a state-of-the-art office in his new custom-built house. "The most essential component of a home office setup is a quality firewall, which blocks outsiders from gaining unauthorized access to your computer, and security equipment," says Green. "Hackers can scavenge passwords. A physician logging in to his hospital system, even using an encrypted password system, would be compromised and the entire institution exposed."

If other family members use computers and the Internet, look into a home network kit. You can connect the PCs in your home so they share printers, drivers, and Internet services. You have a choice of a wired or wireless home network.

If space is tight, consider an all-in-one printer/fax/copier, such as Sharp's AJ-5030 ($235 to $257), and a flat-panel computer monitor.

Software. Get the traditional software package that comes with most computers, but be sure you have what you need to properly interface with your office systems. Ira Krefting, a pulmonary disease specialist in Silver Spring, MD, says he's been burned by software issues between his home office and his practice quarters. "The medical office uses practice management software that's incompatible with the software that I used at home for connecting to the Internet," he says. "I had to buy separate connection software."

Hiring a consultant for a couple hours might be worth your while to avoid such problems.

Privacy. Being home is both a blessing and a challenge. It may be tougher to concentrate and manage time effectively. "If possible, choose a remote spot for your office, away from the common gathering areas such as kitchen or family room," says Faithe Wempen.

"Define your office area in the home, and use that area only for work," she continues. "Don't share a PC with the kids' games."

Make sure your family understands and respects your business time. "Do your kids come into your office uninvited, just to say hi? Close and lock your office door while you're working," advises Wempen, and don't blur the boundary between work and home by multitasking. For example, avoid working on patient records while fixing your child's broken toy.

Can you deduct your home office?

If you have a full-scale practice from home, the tax deduction is a done deal. But if you use a home office as an adjunct for administrative work, don't salivate over the prospect of saving taxes on your home office. In many cases, you can't, and you could even hurt yourself by trying.

To deduct a home office, you'd have to use it exclusively and regularly for business and meet one of two tests: Either it's your principal place of business, meaning you spend most of your working time in the home office and can attribute most of your business income to your activities there; or it's a place where you meet and deal with patients on a regular basis.

"For most doctors, a home office is merely a convenience, and the IRS doesn't think that's worth a tax break," says Gene Price, an accountant with Price and Rosenberg in Bardonia, NY. "In fact, trying to write off a home office might boost your chances of getting audited." Usually, the amount you'd save isn't worth the risk, he adds.

Another drawback is that if you sell the house, and plan to exclude the capital gain tax on the sale, you'll still have to pay capital gains on the profit for the percentage of the house that you've allocated to an office, says Price.

On the other hand, a pulmonary disease specialist in Bethesda, MD, takes the deduction. He has made his home office the principal site for administrative activities, and has no other fixed location where he does that work.

He does charts, dictation, and other administrative jobs there. His home is linked to the office computer by modem. He logs on and gets information from the computer when a patient calls after hours. His wife, who works in the office, does billing from home.


Leslie Kane. Set up your home office the right way.

Medical Economics


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© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health
© National Institute for Occupational Safety and Health