One of the most complex deductions in the Tax Code is the home office deduction. Because of its complexity the IRS announced a simplified safe harbor method for claiming the home office deduction for tax years beginning on or after January 1 2013.
Taxpayers determine the amount of deductible expenses for qualified business use of the home for the tax year by multiplying the allowable square footage by the prescribed rate. Under the safe harbor the allowable square footage cannot exceed 300 square feet and the prescribed rate is $5 which provides a maximum deduction of $1500. This prescribed rate amount may be revisited by the IRS in the future.
Lindemeyer CPA is available to help with any questions about your home office and your tax options. Please contact us online with any questions you have.