Thursday, January 17, 2013

New Rules for Home Office Deductions

The Internal Revenue Service announced this week it’s introducing a simplified option for claiming the home office deduction, which owners of home-based businesses and some other home-based workers use to write off the expense of using part of their residence for work.
Under the new rules business owners will be able to claim $5 for every square foot of home-office space, up to 300 square feet, for a maximum deduction of $1,500. Under the current more complicated method taxpayers have to complete a 43-line form that involves many calculations utility bills, real estate taxes, home improvement and property depreciation.
The new rules will most likely result in more small business owners taking the deduction due to the simplicity of the new calculation.