Home Office Deductions Simplified

One of the most valuable business deductions, yet most overlooked deductions, is the home office.  Often business owners fail to claim their home office because keeping track of the expenses is time consuming and because they are afraid it sends a  “red flag” to the IRS.

Did you know that the IRS has released new guidelines for deducting your home office?  You can now deduct a flat rate of $5 per square foot for up to 3000 square feet of qualified office space.  You can still deduct your mortgage interest and property tax allowed for the space on Schedule A, but you do not have to calculate any actual expense or depreciation from the space.  Keep in mind that if this simplified home office deduction reduces your income below zero, you are not allowed to carrry it forward to future years, as you can with a regular deduction.

Year-by-year determination is allowed for the best home office dedcution, which means you do not have to lock yourself into one method for years on end.

For help determining which method is most beneficial for you this year, give Person CPA Group a call at 504-780-8299.