Calculating Your Home-Office Deduction Just Got EasierThe IRS provides a new streamlined option for determining how much you can deduct for your home-office space.
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The Internal Revenue Service has made a new option for how to calculate your home office space deduction that is easier than it has been in the past. Yes, that's right, theIRSmade something easier.
Many small-business owners have a love-hate relationship with the home-office deduction. It can be a great way to shave away at the amount of income you have to paytaxeson. It is also a 43-line bear of a tax form (form number 8829 for the self-employed) to fill out, rife with opportunities to report something incorrectly and flag yourself for the ever-dreaded audit.
But this week the IRS announced that for the 52 percent of small-business owners with an at-home work space, the deduction can be equal to $5 per square foot of home office space on up to 300 square feet for a maximum deduction of $1,500 per year.
Related:Why You Should Consider Using the Home-Based Office Deduction (Video)
The first year this option will be available is for the 2013 tax year, so you will have one more year of that dreaded 43-line form.
The IRS says that the change in tax-preparing rules is expected to save small-business owners more than 1.6 million hours each year, according to a blog post jointly written by Treasury Deputy Secretary Neal S. Wolin and Small Business Administration Chief Karen G. Mills. The move is part of a larger effort by the Office of Information and Regulatory Affairs to reduce paperwork burdens.
What has your experience been like deducting your home-office expenses on your tax form in years past? Will this make your life easier?Leave a comment below and let us know.
