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Home office deductions: Divide and conquer

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Q. I’m interested in the simplified home office deduction. Can it be claimed for part of a room? M.A., New Canaan, Conn.

A. The basic rules for deducting home office deductions are the same for the simplified method as the regular method. Significantly, you qualify for deductions only if you use the home office “regularly and exclusively” for business purposes. The area can be a room or other separately identifiable space, so it helps to physically divide the room. But you won’t meet the exclusive part of the test if you use the same area on a personal basis.

Tip: The new simplified deduction, available beginning in 2013, is capped at $1,500.

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