Home Office Deduction – Simplified Method
Starting in 2013, it’s much easier to take the home office deduction on your sole proprietor business. Small business owners no longer have to deal with figuring out how much they paid for all of those utilities throughout the year and allocating them, now it’s as easy as telling your tax preparer the total square footage of your home office. The deduction is simply the square footage of your home office multiplied by $5. The max deduction is $1,500 (or 300 sq ft). There are different rules that apply if you used multiple rooms, changed homes throughout the year, or ran a daycare business. Make sure to consult a professional on those topics.