home office

To qualify for the home office deduction, the space must be used exclusively and regularly for business. This means a portion of your home must be dedicated solely to business activities and used on a consistent basis. The deduction can be calculated using either the simplified method, which allows a deduction of $5 per square foot up to 300 square feet, or the regular method, which involves calculating the actual expenses of maintaining the home office (e.g., mortgage interest, utilities, insurance) and applying the percentage of the home used for business. Common misconceptions include believing that occasional use or using a space for both personal and business purposes qualifies for the deduction, which it does not. Edge cases include those who use a separate structure on their property for business purposes, which can also qualify.