The home office tax deduction is one of the most complicated calculations that taxpayers have to perform. The form runs over 40 lines and comes with dozens of pages of instructions. It’s also considered an audit “red flag” by many tax preparers. For these reasons, millions of the estimated 52 percent of small businesses in the U.S. that are home-based don’t take the deduction.
The IRS has now announced a streamlined process that some taxpayers may opt to follow. Instead of going through the lengthy process, the streamlined version allows you to deduct a standard $5 per square foot of home office space up to 300 square feet.
If you expect to have more than $1,500 in costs associated with your home office, you'll have to complete the standard form.Read the full article at the U.S. Department of The Treasury blog. Read more Finance Watch articles. Stay tuned to OPEN Forum for more in-depth coverage of this new home-office deduction.