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Home office deduction benefits small business owners

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Posted by Admin Posted on Feb 13 2020

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Small business owners who work from home may qualify for a home office deduction.

They have two options for figuring this deduction.

The regular method divides expenses of operating the home between personal and business use. Self-employed taxpayers file Form 1040, Schedule C, and compute this deduction on Form 8829.

The simplified method has a rate of $5 a square foot for business use of the home. The maximum deduction is $1,500.

Special rules apply for certain business owners:

  • Daycare providers complete a special worksheet, found in Publication 587.
  • Self-employed individuals use Form 1040, Schedule C, Line 30 to claim deduction
  • Farmers claim the deduction on Schedule F, Line 32.

If you have any questions regarding accounting, domestic taxation, essential business accounting, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.

Source: IRS

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