Home Office Tax Deduction Simplified Method

Say you use a den or spare bedroom at home as your home office and. The easiest way to calculate your home office tax deduction is called the simplified method the irs allows taxpayers to deduct 5 per square foot up to 300 square feet of home used in. The simplified method for determining the home office deduction is fairly straightforward.

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There are additional rules regarding depreciation and carryover losses.

Home office tax deduction simplified method. What is the simplified method for determining the home office deduction. The maximum square footage you can take the deduction for is 300 square feet. Why is the simplified method being offere. If your workspace is less than the maximum 300 square foot area covered under the simplified method your deduction will be less.

For example if you have an office space of 150 square feet and your home is 1200 square feet you are under the maximum of 300 square feet for the simplified deduction so you have the option of taking either the simplified or the regular deduction. You receive a standard deduction of 5 per square foot up to 300 square feet the deduction can t exceed 1 500. Using the optional method you simply deduct 5 for every square foot of your home office. 1 the simplified method says you can deduct 5 per square foot.

However the deduction is capped at 1 500 per year. 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. Since 2013 the irs has even offered a simplified method in addition to the regular business percentage method to determine the home office deduction. 2 the regular.

The irs introduced a simpler option for deducting home office expenses in 2013. This simplified option does not change the criteria for who may claim a home office deduction. Instead of keeping records of all of your expenses you can deduct 5 per square foot of your. There are two ways to calculate your home office deduction.

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. 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. You can read more about those on the irs website here. So it can only be used for offices up to 300 square feet.

It merely simplifies the calculation and recordkeeping requirements of the allowable deduction. The simplified home office deduction can be claimed starting in tax year 2013.