Do you work from home? If so, you may be familiar with the home office
deduction, available for taxpayers who use their home for business.
Beginning in 2013, there is a new, simpler option to figure the business
use of your home.
The new simplified option does not change the rules for who may claim a
home office deduction, it merely simplifies the calculation and record
keeping requirements.
Here are some facts you need to know about the new, simplified method to
claim the home office deduction.
1. If you use this method to claim the home office deduction, you will
not need to calculate your deduction based on actual expenses. You may
instead multiply the square footage of your home office by a prescribed
rate.
2. The rate for 2013 is $5 per square foot of the part of your home used
for business up to a maximum footage allowed of 300 square feet. This
means the most you can deduct using the new method is $1,500 in 2013.
3. You may choose either the simplified method or the actual expense
method for any tax year. Once you use a method for a specific tax year,
you can later change to the other method for future years, you just
cannot change for the same year.
4. If you use the simplified method and you own your home, you will not
be able to depreciate your home office. You can still deduct other
qualified home expenses, such as mortgage interest and real estate
taxes. You will claim these deductions on Schedule A, Itemized Deductions.
5. You can still fully deduct business expenses that are unrelated to
the home if you use the simplified method. These may include costs such
as advertising, supplies and wages paid to employees.
6. If you use more than one home with a qualified home office in the
same year, you can use the simplified method for only one in that year.
However, you may use the simplified method for one and actual expenses
for any others in that year.
Remember, you must still use the space regularly and exclusively.
Premiere Business Services provides tax preparation for individuals and
business. We also provide accounting and payroll services for small
business owners who want to keep as much of their business profits as
legally possible. Call us, (636)947-8885, to find out how we can help
you grow your business while saving you tax dollars.
