Home Office Expenses Simplified Method

For example let s say your total allowable indirect home expenses for your whole home are 20 000 for a specific year and your home office space is 10 of your home for business purposes.

Home office expenses simplified method. The simplified method as announced in revenue procedure 2013 13 is an easier way than the method provided in the internal revenue code the standard method to determine the amount of expenses you can deduct for a qualified business use of a home. The rate for 2019 is 5 per square foot. Fortunately there s a simplified method that s been available since 2013. The simplified method takes the square footage of your home office with a maximum of 300 square feet and multiplies it by a rate prescribed by the irs.

This simplified option does not change the criteria for who may claim a home office deduction. If you meet the criteria above you ll have two choices for calculating the deduction. Why is the simplified method being offere. Since 2013 the irs has even offered a simplified method in addition to the regular business percentage method to determine the home office deduction.

It merely simplifies the calculation and recordkeeping requirements of the allowable deduction. The simplified method and the actual expense method. For example if you ve converted a 300 square foot bedroom to an office you use exclusively and regularly for business you can write off 1 500 under the simplified. Beginning in tax year 2013 returns filed in 2014 taxpayers may use a simplified option when figuring the deduction for business use of their home.

You can deduct 5 for each square foot of home office space up to a maximum total of 1 500.