A person uses a area of his house strictly for business. This is understood.
But what about utilities, property taxes, mortgage interest, phones. Is this somehow
Prorated or do you deduct the whole amount for the entire house

You use the percentage based on square feet, plus other expenses at that same percentage.
Be aware that this is one of the biggest flags for an audit.
I haven't read the rules in recent years... you may have to have a separate phone for business. You used to.
Note that property taxes are deductible for the whole house anyway, so read the section on that.
And mortgage interest is deductible separately anyway too.

http://www.irs.gov/pub/irs-pdf/p587.pdf

As Joy noted, everything is prorated based on the ratio of square footage.

Note, however, that that portion is now commercial property and this will affect the sale of the house. Frankly, I have never found the home office deduction to be worth the risk of audit and other problems it causes.

We have had a home based business for about 5 years now. Our accountant is in agreement with Scott's statement. The deduction is not worth the risk of audit.

Very good opinion

I disagree. If you meet all of the criteria to claim the home office deduction, then claim it. I have for over 20 years and have NEVER been audited.

The real issue is do you use it for nothing else, it is not a guest bedroom, used for guests, it is not the dinning room, but a separate room, never ever used for other purpose.

In my Georgia home, I had a room, separate interest and not used for anything else, even storage of household items, I did use it for the deduction.