Home Office 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.

Home office simplified method. Using the optional method you simply deduct 5 for every square foot of your home office. For example if youve converted a 300 square foot bedroom to an office you use exclusively and regularly for business you can write off 1500 under the simplified method 300 square feet x 5. The simplified home office deduction can be claimed starting in tax year 2013. Fortunately theres a simplified method thats been available since 2013.

If you want to use the regular method youll need to do more calculations and use form 8829 explained below. Deciding whether to use the simplified method or regular method when claiming the home office deduction depends on the size of your home office and the calculations you want to make. 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. For some small business owners the difference in the deduction isnt worth the extra paperwork and record keeping that come with the regular method.

Allowable square footage of home use for business not to exceed 300 square feet. You can deduct 5 for each square foot of home office space up to a maximum total of 1500. Using the optional method relieves you from having to keep. Simplified home office deduction option explained an easy alternative to form 8829.

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. If you want to use the simplified method your deduction is 5 x 150 sq. However the deduction is capped at 1500 per year. So it can only be used for offices up to 300 square feet.