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10 Surprising Tax Preparation Tips

        Money | Taxes

6
Home Office Deduction
If you have a dedicated workspace at home that’s your primary place of business, rejoice! Claiming it as a deduction is easier than it used to be. ©Stockbyte/Thinkstock
If you have a dedicated workspace at home that’s your primary place of business, rejoice! Claiming it as a deduction is easier than it used to be. ©Stockbyte/Thinkstock

If you've worked from home and tried to claim part of your house as an office in the past, you know what an enormous amount of paperwork it could involve. The IRS finally felt your pain and simplified the home office deduction in 2013.

Basically, you still have to meet two requirements. First, you must use a portion of your house regularly and exclusively for business. This means you can't shove the dinner dishes out of the way and use the dining table as your desk and then claim the dining room as your office. Second, the office must be your principal place of business.

If you meet these requirements, here's how to claim the deduction the easy way:

  • Use a standard deduction of $5 per square foot of space used for business, up to a max of 300 square feet (91 square meters).
  • Claim allowable itemized deductions, such as mortgage interest, utilities or real estate taxes on Schedule A.
  • Don't worry about the home depreciation deduction; it isn't allowed with the simplified option.

If you're a tax paperwork junkie, feel free to continue using the more complicated method. The IRS still allows it [source: IRS Home Office].


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