Claiming the home-office deduction is about to get easier. The IRS announced last week it is introducing a simplified option for claiming the home office deduction, which owners of home-based businesses and some other home-based workers use to write off the expense of using part of their residence for work.
In the past many have passed up the deduction because the calculations required are so complicated.
Under the new rules business owners will be able to claim $5 a square foot for up to 300 feet or a maximum deduction of $1,500. The new deduction will be available for 2013 tax returns and comes with a much simpler form (I know ... we will believe it when we see it).
The current method requires taxpayers to fill out the 43 line Form 8829 which, unless you are one of the nerds on the Big Bang Theory, can be overwhelming.
The IRS says you can stick with the old form and in many cases that will give you a bigger deduction.
The IRS says nearly 3.4 million taxpayers claimed the home-office deduction in 2010 but the National Association of the Self-Employed found that nearly 60% of the business owners who used home offices didn’t file for the deduction so the change may benefit many business owners.
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