I've been telecommuting at least 2 days, if not 4 per week now for over 8 years and I'm a huge advocate. However, my situation is unique compared to those already expressed. I am the only SQL DBA in our organization, I'm supporting upwards of 70 instances and 800 databases. My customers are the IT staff (including the SQL Developers for internally-developed apps) as well as the application analysts and a smattering of end users and Managers. I am not a part of a team per-se, I am the DBA Team Manager, Team Lead, and Team all rolled up into one. I report to the Server and Storage Manager only because they have no idea where else to fit me. I do have to collaborate on projects with coworkers, don't get me wrong. This is easily accomplished with conference calls, IM, and email. What I am getting at is that I have greater control over managing my time and tactics than most DBAs.

As for tools, I make use of Outlook, Sharepoint, OCS... all previously mentioned by the other posts. I also have a VOIP setup that allows me to answer my office extension from my laptop, as well as an aircard for when I am traveling and have no access to WiFi. I have a dedicated home office with DSL, WiFi, and all the trappings of the normal office.

Personally I find myself more productive when working remotely, than when I am in the office. Though I've been telecommuting for so long, there is that perception that I am not in the office, therefore I must have the day off. It works to my advantage since it prevents the "walkup work" that comes with being in the office and visible to anyone stopping by. I often joke that I come into the office to take the day off.

As for taxes, you can deduct the prorated expenses for your mortgage interest, utilities, etc. based upon the sq. footage of your dedicated office compared to your home's total sq. footage. You also must prorate based upon the percentage that you use the office solely for business purposes. Therefore if your office is 10' x 10' and your home is 2000 sq. feet you can deduct 100/2000 or 5% of these expenses if you use your office 100% for business. 2.5% if it is used 50% for business. You can also deduct the cost of office furniture, etc. for those expenses strictly for the office at the prorated amount of the business use: a $500 desk used 50% for business = a deductible expense of $250.00 in the year it's purchased under certain rules. The most common tax question is mileage deduction. You can only deduct the mileage between your home office and work on those days you must drive in if your company mandates telecommuting. I can not deduct it since my arrangement is a benefit for me, not a mandate by my company (like your situation.) Even in this case, if you're reimbursed for commuting on those days that they want you to come in (I hope so) then you can not claim mileage as a deduction. Please keep in mind my accounting degree was earned 17 years ago and I only practice accounting once a year when I do my taxes.

I have yet to see a downside to the arrangement I have. If there is one suggestion I've found that works extremely well it is to provide your Manager with a daily status report itemizing the workload for the day and any issues that arose. This prevents you from having to include them on every email thread (unless their help is needed) and removes the "out of sight - out of mind" situation that may impair advancement at review time.

Good luck with the arrangement. I hope it works out as well for you.