Home office deduction in a nutshell

by Posted on

For someone considering claiming the home office deduction, there are two options available:

Regular method
This method requires computing the business use of the home by dividing the expenses of operating the home between personal and business use. Direct business expenses are fully deductible and the percentage of the home floor space used for business is assignable to indirect total expenses. Self-employed taxpayers file Schedule C, Profit or Loss From Business (Sole Proprietorship), and compute this deduction on Form 8829, Expenses for Business Use of Your Home.

Simplified method
The second option, the simplified method, reduces the paperwork and recordkeeping burden. It has a prescribed rate of $5 a square foot for business use of the home. There is a maximum allowable deduction available based on up to 300 square feet. Choosing this option requires taxpayers to complete a short worksheet in the tax instructions and enter the result on the tax return.

Further details on the home office deduction and the simplified method can be found in Publication 587, Business Use of Your Home, on IRS.gov at: https://www.irs.gov/publications/p587

#homeoffice #schedulec #form8829 #business #proprietorship #publication587 #irspublication #phit #personalhealth #taxsecurity #irs #taxreturn #fraud #taxfraud #tax #taxcut #tcja #carlosnazario #carlosjnazariodiaz #amend #amended #amended1040 #1040 #1040x #1065 #1120 #k1 #qbid #regulations #taxregs #taxregulations #IRC #veteran #veterans #CIVTFA #PuertoRico #TaxHaven #invest #Taxbreaks #Act73 #Act 20 #Act22 #incentives #taxincentives

Published by Carlos Nazario