The IRS has made it easier to deduct a home office, starting in 2013.
In the past, the home office deduction was very difficult to document, and the IRS was very suspicious of it. Even people who could legitimately claim the deduction were often hesitant to do so for fear that it could trigger an audit.
This year, though, the IRS has created a “safe harbor” for taxpayers. You might not be able to deduct every expense if you use this method, but it will be a lot easier and safer.
The new method involves measuring the square footage of your office and multiplying by $5. There’s a maximum of 300 square feet, which works out to a $1,500 deduction.
If you use this method, you can’t deduct actual expenses or depreciation, even if they would come to more than $1,500. However, you can continue to take other, non-office deductions pertaining to your home, such as mortgage interest and property taxes.
