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What You Should Know About the Home Office Deduction


The home office deduction is only one of a number of different deductions and credits that allow self-employed taxpayers to save money come tax season. With more people working from home than ever, a thorough understanding of these deductions has become critical for many taxpayers, so if you have been working from home and have questions about whether you qualify for a home office or other type of self-employment based deduction, please call our experienced Florida tax return preparation attorney for help.

Who Qualifies for the Home Office Deduction?

There are two main requirements that taxpayers must fulfill before they can claim the home office deduction. The first of these requirements states that there must be a part of the home that is exclusively used for conducting business on a regular basis. Someone who uses a room in their home as a studio to run a pottery business, for example, can only claim a deduction for the square footage of that room. Furthermore, the home in question must be the taxpayer’s principal place of business in order to qualify for the deduction, although some taxpayers can meet this requirement if they can demonstrate that they use the space for administrative or management activities and that there is no other location in which to do so. Fortunately, this means that even those who conduct business outside of the home could still qualify for the home office deduction, as long they satisfy the first requirement.

It’s also important to note that a person doesn’t have to be a homeowner in order to claim the home office deduction, as it is also available to renters. This rule applies not only to single family dwellings, but also to apartments, condominiums, mobile homes, boats, and even structures like unattached garages, studios, and greenhouses.

Calculating the Home Office Expense Deduction

Taxpayers who believe that they qualify for the home office deduction can calculate their total deduction in one of two ways. The first, which is known as the simplified option, allows taxpayers to claim a deduction at a rate of $5 per square foot for the business use of the home. The maximum deductible size for this option is 300 square feet, while the maximum amount is $1,500. The second option is known as the regular method and requires the determination of a home office’s actual expenses, including mortgage interest, insurance, repairs, utilities, and depreciation. When using the regular method, taxpayers base their deductions on the percentage of the home that is actually used for business purposes.

Reach Out to Our Florida Legal Team

For help determining which types of deductions you or your family could qualify for, please call us at our office at 386-490-9949 and a member of our legal team will help you schedule a free one-on-one consultation with experienced Florida tax return preparation lawyer Ronald Cutler, P.A. We make ourselves available to clients seven days a week, so if you have questions about the home office deduction or another self-employment based deduction, please don’t hesitate to reach out to us today.