Home Office Simplified Method

So if you use a whole room or part of a room for conducting your business you need to figure out the.

Home office simplified method. The simplified deduction doesn t have anything to do with your ability to qualify for a home office deduction. It just changes the way the deduction is calculated. However the deduction is capped at 1 500 per year.

What is the simplified method for determining the home office deduction. Owners of home based businesses now have a second simpler way to calculate the deduction for the home office space. Since 2013 the irs has even offered a simplified method in addition to the regular business percentage method to determine the home office deduction.

Using the simplified method to figure your deduction. If you use the simplified method to figure your deduction for the business use of a home your mortgage interest mortgage insurance premiums real estate taxes and casualty losses are treated as personal expenses and they are subject to any limits that apply to deducting personal expenses. For taxable years starting on or after january 1 2013 filed beginning in 2014.

Allowable square footage of home use for business not to exceed 300 square feet percentage of home used for business. Deduction for home office use of a portion of a residence allowed only if that portion is exclusively used on a regular basis for business purposes. You receive a standard deduction of 5 per square foot up to 300 square feet the deduction can t exceed 1 500.

Simplified option regular method. Follow along as we walk you through the basics of the home office tax deduction and help you figure out which method works best for your home business. Under the simplified method you ll receive a deduction of 5 per square feet of home office space with a maximum of 300 square feet.

Using the optional method you simply deduct 5 for every square foot of your home office. So it can only be used for offices up to 300 square feet. For example if you have a 10 foot by 10 foot room in your house that s set up as your home office you d be free to claim a 500 deduction using.