Home Office Tax Deduction

If you use part of your home "exclusively and regularly" for conducting business, you may be able to deduct expenses such as rent, insurance, utilities, and fees.
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But, did you know there are 2 different ways to calculate the tax deduction of your home office?
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1) Simplified Method - Use a standard rate of $5 per square foot of the portion of the home used for business (up to a maximum of 300 square feet).
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2) Regular Method - Calculate the Business Use Percentage=Home office square footage / total home square footage. Multiply the BUP by rent, insurance, utilities, repairs, maintenance, trash fee, security fee, etc.
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Example: You pay $2,200/mo for a 1,000sqft apartment, of which 200sqft is used exclusively as your home office. So BUP=20%. You also pay $175/mo for utilities.
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Simplified Method=$1,000 annual tax deduction ($5*200sqft)
Regular Method=$5,700 annual tax deduction ($2,375*20%*12months)
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There is nothing Simple or Regular about the tax code. If you would like to learn more about tax planning, click Book A Meeting.

***THE ABOVE IS NOT TAX ADVICE***