Solomon & Hoover CPAs, PLLC Blog - Financial Guidance to Help Your Business Succeed

Solomon & Hoover CPAs, PLLC Blog

Financial Guidance to Help Your Business Succeed

Calculating the home office deduction just got easier

BMSsu14_4 Tax

Good news if you generally claim a home office deduction! The IRS has introduced a faster, simpler calculation for what many consider a tedious annual chore.

In the past, you only had the option of deducting actual home office expenses. This involves calculating the percentage of your home that your office occupies and the rent, mortgage, utility and tax expenses you’ve paid.

With the new method, you simply multiply the square footage of your home office (up to a maximum of 300 square feet) by a fixed rate of $5. So if you use the simplified method, you may be able to claim as much as $1,500 per year. If you wish to claim a greater amount, you’ll need to use the actual expense method.

What hasn’t changed is who may claim the deduction. You must use your home regularly and exclusively for business purposes and it must be your principal place of business or where you regularly meet clients. Employees who work from home may not be able to claim the home office deduction. To learn more, contact your tax advisor.

Leave a Reply