If you take a deduction for business use of your home (commonly called the Home Office Deduction), the IRS is offering a simplified method, starting for the 2013 tax year (and on your tax form for the first time in early 2014). The deduction would max out at $1,500, based upon $5 for 300 square feet and will require a lot less record keeping and should save time & effort. The IRS write up is at this link.
Since this is called ‘optional’, the current method of claiming a portion of mortgage interest/rent, property taxes, utilities, etc. should still be an option (although this isn’t expressly stated by the IRS). Also note that the current restrictions of using a portion of your home ‘regularly & exclusively’ for business use still applies.
For a lot of people, this will be an easier option for calculating a complex deduction.
Here’s a free brochure to with info on this topic – it’s designed for printing so may be difficult to read online. Business Use of Home
Tax season is fast approaching – if you need a hand with your personal or business tax returns, have questions, or just need a hand, please feel free to contact me. My Facebook & Linked-In profiles are below and so is the new link to the Best Tax Preparers website (an excellent place to leave questions!).
Thomas C. Hodge, CPA
The Hodge Group
3040 N. Menard Avenue
Chicago, IL 60634
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