Simplified home office deduction

March 23, 2016 Written by

During this time of year, many folk forget there is a new simplified method for claiming home office expenses that we have mentioned in past posts.  While it doesn’t take away the requirements for eligibility to take the deduction, the rules have been greatly simplified.

Introduced in tax year 2013, the optional deduction is designed to reduce the paperwork and recordkeeping burden for small businesses. The optional deduction is capped at $1,500 per year, based on $5 a square foot for up to 300 square feet.

Though homeowners using the simplified method cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.

Feel free to contact the office for further details.



Written by: Doug Rodrigues