Taxpayers may use a simplified method when calculating the deduction for business use of their home for Form 8829. The simplified method doesn't change the criteria for who may claim a home office deduction.
Follow these steps to select the simplified method:
- Go to Screen 29, Business Use of Home (8829).
- Enter a 2 in the field 1=use actual expenses (default), 2=elect to use simplified method.
About the simplified method
- The simplified method allows a standard deduction of $5 per square foot of home used for business, with a maximum of 300 square feet.
- Allowable home-related itemized deductions, such as mortgage interest and real estate taxes, are claimed in full on Schedule A.
- No home depreciation deduction or later recapture of depreciation is allowed for the years the simplified option is used.
- The amount of deduction computed using the simplified method cannot exceed the gross income derived from the qualified business use of the home, reduced by business deductions (advertising, wages, supplies, etc.).
