If you use your home for business, there are expenses you can deduct on your tax return. The home office deduction is available to both home owners & renters alike. The home must be used by a self-employed individual or an employee who works from home for his employer’s convenience.
This deduction has been available for a few years now, however with the tax year beginning January 1st, 2013 (filing starting January 1st, 2014), the Internal Revenue Service issued Rev Proc. 2013-13. This revenue procedure details an optional safe harbor available to individual tax payers for calculating a home office deduction.
The individual can claim the Home Office Deduction based on either the Simplified Method or the Regular Method (Details Follow).
• A standard deduction of $5 per sq foot for a home used for business up to a maximum of 300 sq feet.
• No home office depreciation deduction is allowed nor is a later recapture for the years the simplified option was used.
• Allowable home related expenses, such as, Mortgage Interest or Property Taxes is claimed in full on Schedule A. Read More