Requirements to Claim the Home Office Deduction So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities. Generally, when using the regular method, deductions for a home office are based on the percentage of your home devoted to business use.

These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Taxpayers using the regular method (required for tax years 2012 and prior), instead of the optional method, must determine the actual expenses of their home office. This new simplified option can significantly reduce the burden of recordkeeping by allowing a qualified taxpayer to multiply a prescribed rate by the allowable square footage of the office in lieu of determining actual expenses. The standard method has some calculation, allocation, and substantiation requirements that are complex and burdensome for small business owners. Simplified Optionįor taxable years starting on, or after, Janu(filed beginning in 2014), you now have a simplified option for computing the home office deduction (IRS Revenue Procedure 2013-13, January 15, 2013). The home office deduction is available for homeowners and renters, and applies to all types of homes. If you use part of your home for business, you may be able to deduct expenses for the business use of your home.