If you’re among the many small business owners who regularly forfeit the home office tax deduction for fear of attracting an audit or because it is just too complicated to calculate, there’s good news for you out of Washington today.
The Small Business Administration and the IRS have coordinated to provide “a new, simpler option for calculating the home office tax deduction.” Taking the deduction will no longer require calculating the energy costs, mortgage interest, homeowner’s insurance, property taxes, and repairs you pay on your home office as a percentage of the entire home. Instead, small business owners and employees who work from a qualifying home office will have the option to deduct $5 per square foot of office space on up to 300 square feet, for as much as $1,500 in deductions annually.
According to the IRS’s calculations, the simpler formula will save taxpayers more than 1.6 million hours per year in tax preparation time. One hitch: the new rule won’t go into effect tillRead More »from A simple home office tax deduction is coming