Can I Deduct Home Office Expenses?
Yes, you can deduct home office expenses if you meet certain requirements set by the IRS. To qualify, your home office must be used regularly and exclusively for business purposes. This means that the space should not serve any personal use at the same time.
There are two methods for calculating your home office deduction:
- Simplified Method: This allows you to deduct $5 per square foot of the home used for business, up to a maximum of 300 square feet, totaling a maximum deduction of $1,500.
- Regular Method: This involves calculating the actual expenses associated with your home office, including mortgage interest, insurance, utilities, repairs, and depreciation based on the percentage of your home dedicated to business use.
To claim these deductions, you must file a Schedule C if you are self-employed. For employees, the deductions may differ, especially since the Tax Cuts and Jobs Act of 2017 eliminated many of the home office deductions for employees that are not self-employed.
It's crucial to keep detailed records of your expenses and the usage of your home office to substantiate your claims. Always consider consulting with a tax professional to ensure compliance with the latest tax laws and maximize your deductions.