Home Office Deduction: New and Improved

15 Dec

home officeFor those of you that work from home there is some good news for the 2013 tax year.  The IRS has rolled out a simplified process for claiming the home office deduction.  In years past the deduction hinged on the office’s square footage as a percentage of the total dwelling.  The new method allows for a much easier calculation:  $5 per square foot, with a 300 square foot max, or $1,500.

In addition to the simplified calculation, the new method has the following differences from past years:

  • home related itemized deductions claimed in full on Schedule A
  • no deprecation deduction
  • no recapture of deprecation upon sale of home
  • amount in excess of gross income limitation may not be carried over
  • loss carryover from use of regular method in prior year may not be claimed

Of course the same rules apply, that the home office must be exclusively used on a regular basis for business purposes.  While these restrictions didn’t change, the fact remains that the new method is much easier to calculate the home office deduction.  Additionally, it could create a larger home office deduction for those with lower mortgage payments or rents, or smaller home offices in relation to the entire dwelling.


This post is provided for informational purposes only and does not constitute legal advice. It is intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. It is not intended to create an attorney-client relationship and is offered only for general informational and educational purposes. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.

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  1. Tax Changes for 2014 - Staub Law - January 31, 2014

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