About the Home Office Deduction
If you use a portion of your home regularly and exclusively for your business, you can deduct expenses related to that space. The IRS provides two ways to calculate this:
- Simplified Method: You deduct a flat $5 per square foot of your home office, up to a maximum of 300 square feet ($1,500 total). This method is significantly easier for record-keeping.
- Actual Expense Method: You calculate the percentage of your home used for business and apply that percentage to your actual home expenses like rent, utilities, and insurance. This often yields a higher deduction for those in high-cost areas or with large offices.