Do you ever take the home office deduction?

Do you work at home or have a home-based business?  If so, you should be aware that the IRS has created a simpler option for calculating the deduction for the business use of your home.  The new option makes record keeping easier because, instead of maintaining records of specific home office expenses, you can use a standard rate per square foot.  The rate is $5 per square foot (up to a maximum of 300 sq. feet or $1,500) for qualifying business use space in place of taking a pro rata percentage of items such as mortgage interest, taxes and repairs. Keep in mind there are good and bad aspects to this “simpler” method. The new method gives you back your full interest and tax deduction on schedule A, but you will lose your depreciation and loss carryover deductions. Of course, you must still use your home office regularly and exclusively for business.  This may be a welcome relief for some taxpayers, but it might not be the best choice for others.  Let our firm’s tax experts help you determine if the simplified deduction is the right choice for you.   Please contact us at (757) 926-4109 for answers to all your financial questions and concerns – it’s what we do.

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