A Simpler Way To Claim the Home Office Deduction for 2013

If you use your home for business, and have avoided claiming the Home Office Deduction in the past because it seemed too complicated, I have good news for you! Beginning in tax year 2013, the IRS now offers the “Simplified Method” option for calculating your Home Office Deduction. Prior to that, claiming the Home Office Deduction meant taking a percentage of your mortgage interest, property taxes, utilities, insurance, etc., causing many taxpayers to forego the deduction altogether. The Simplified Method allows you to use the IRS standard rate of $5 per square foot of the area used exclusively in your business (not to exceed 300 square feet). The advantage of using this Simplified Method (in addition to the fact that it’s just easier!) is that (if you are a homeowner), you can still take the FULL mortgage interest and property tax deduction on your Schedule A for the year, versus having to allocate those amounts between the Home Office Deduction Form and your Itemized Deduction Form. This new rule basically allows you to LEGALLY “double-dip” on your deductions! Another thing I like about it is that you’re not stuck using one method or the other in subsequent tax years. In other words, you may find it more advantageous to use the Simplified Method in 2013, and may find that the regular method is better in 2014. If you have any questions, please don’t hesitate to either call or e-mail me.

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