Simplified Option for Claiming Home Office Deduction Starting 2013

The IRS is trying to simply the burden of filing the 43 line form 8829.
The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and record keeping burden on small businesses.
Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.
Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option.

Your accountant should look at which method gives you a better tax savings. This will be similar to looking at the actual auto expense verses using the mileage method.

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