Home Office Simplified Method

It just changes the way the deduction is calculated.

Home office simplified method. So it can only be used for offices up to 300 square feet. 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. The simplified method as announced in revenue procedure 2013 13 pdf 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.

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. The simplified method lives up to its namesake by offering an easier and simpler way to calculate the home office tax deduction. For taxable years starting on or after january 1 2013 filed beginning in 2014.

The simplified home office deduction can be claimed starting in tax year 2013. 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. Owners of home based businesses now have a second simpler way to calculate the deduction for the home office space.

The simplified deduction doesn t have anything to do with your ability to qualify for a home office deduction. Simplified option regular method. Generally when using the regular method deductions for a home office are based on the percentage of your home devoted to business use.

Using the simplified method to figure your deduction. Allowable square footage of home use for business not to exceed 300 square feet percentage of home used for business. The simplified method for determining the home office deduction is fairly straightforward.

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. What is the simplified method for determining the home office deduction. So if you use a whole room or part of a room for conducting your business you need to figure out the.