What are the home expenses that count toward the home office deduction? IRS Publication 587 provides that allowable office-in-home expenses are of three kinds: Under the regular method, you must determine the actual expenses of your home office. Refer instruction for form 8829 What is Regular Method ? For the tax year, the prescribed rate is $5 per sq ft area of the office and the maximum area of home office allowable is 300 sqft.
Under this simplified option, you multiply a prescribed rate by the allowable square footage of the office in lieu of determining actual expenses. IRS Revenue Procedure 2013-13, January 15, 2013, initiated this method of the allowable deduction for expenditure on the home office. Home Office Deduction Calculator Home Office Deduction Calculator What is simplified home office deduction method ? But once a method for a taxable year is selected, you cannot later change to the other method for that same year. You have the option to choose either the simplified method or the regular method for any taxable year on your tax return. There are two options for computing the amount of deduction that can be claimed while computing business income being carried out from a portion of your home.
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