Simplified Home Office Deduction

For 2013 returns filed in 2014, the IRS is now offering a simplified home office deduction. The new optional deduction is $5 for each square foot of home office space, up to a maximum of 300 square feet. That comes to a maximum $1,500 annual home office deduction. Instead of filling out Form 8829, you’ll use a worksheet in the Schedule C instruction book and enter your simplified home-office deduction amount on Schedule C. While this new options can simplify the process please note that the requirements to qualify as a home office still apply. IRS requires that the office space must be used regularly and exclusively for business.  We recommend that you still track  you actual expenses and then test which method will give you the better deduction.

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