New Home Office Deduction Rules
The home office deduction is one of the most under-utilized tax breaks available to taxpayers. If you use an area of your home regularly and exclusively for business, then you are eligible to deduct a portion of your housing costs. (And please note that you don’t need to use an entire room exclusively for business purposes.)
However, many taxpayers seem to be intimidated by the apparent complexity of calculating this deduction. According to Forbes, while “an estimated 26 million Americans have home offices, just 3.4 million taxpayers claim home-office deductions.”
To address this issue, the IRS recently announced a “simplified option.” The new optional home office deduction is based on $5 per square foot for up to 300 square feet (for a $1,500 maximum deduction). Homeowners using this simplified method are also allowed to deduct all of their mortgage interest and real estate taxes on the home as Schedule A itemized deductions.
If you’ve hesitated to claim the home office deduction in the past, it is time to reconsider. Take the deductions to which you are entitled! For additional information on this tax deduction: