Irs Home Office Deduction Simplified Method

So it can only be used for offices up to 300 square feet.

Irs home office deduction simplified method. Its worth 5 for every square foot that makes up your office space. The rate for 2019 is 5 per square foot. 10 10 5 500. 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.

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 optional method you simply deduct 5 for every square foot of your home office. What is the simplified method for determining the home office deduction. For example if you have a 10 foot by 10 foot room in your house thats set up as your home office youd be free to claim a 500 deduction using the simplified method.

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. The simplified home office deduction can be claimed starting in tax year 2013. If your home office is 300 square feet or less the irs has an optional simplified method of calculating your home office deduction. Simplified option regular method.

How does the simplified home office deduction work. You can deduct 5 for every square foot of your home office up to a maximum of 1500. With the simplified method you can claim a deduction of 5 per square foot for up to 300 square feet. As an alternative to computing the actual costs of your expenses the irs offers a simplified method to make the home office deduction calculation easier.

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 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. For anyone who wants to claim the simplified home office deduction the irs allows you to claim a deduction thats based on the square footage of your office. 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.