Simplified Home Office Deduction Option

New for 2013

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Gary Hensley speaks to members of the American Christian Fiction Writer Association–Indiana State Chapter in Ft. Wayne, IN on May 4, 2013.

Beginning in tax year 2013 (returns filed in 2014), you may use a simplified option when figuring the deduction for business use of your home.

Highlights of the Simplified Option

  1. Standard deduction of $5 per square foot of home used for business (maximum 300 square feet).
  2. Allowable home-related itemized deductions claimed in full on Schedule A (such as mortgage interest and real estate taxes).
  3. No home depreciation deduction or later recapture of depreciation for the years the simplified option is used.

The simplified option does not change the criteria for who may claim a home office deduction.  It merely simplifies the calculation and recordkeeping requirements of the allowable deduction.

You may choose to use the simplified method or the regular method for any taxable year.  Once you have chosen a method for a taxable year, you cannot later change to the other method for that same year.

For a comparison of the regular method and the simplified method, you may refer to this IRS document and also to IRS Revenue Procedure 2013-13.

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