Qualified for a Home Office Deduction? That Is How You Calculate It

November 23, 2017

If you are qualified for a home office deduction, you need to determine how much you can deduct. To determine the value of the deduction you can do two ways.


Simplified option:

Deduct by the square feet. According to IRS, if your home office has 300 square feet or less you can use this method. The maximum amount that you can deduct using this option is $1500. It is calculated by multiplying 300 square feet by $5 per square foot.


Actual expense deduction:

Deduct by the percentage. This method is considered to be more difficult to calculate because you have to compare the exact size of the office to the home size and deduct the percentage that your office takes. Also, you can deduct some percentage of your mortgage interest or rent, taxes, maintenance and repairs, insurance, utilities and other expenses.


If you choose to use an actual expense deduction method instead of a simplified option, you have to keep in mind that this method requires an accurate record-keeping.


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