Deductions
6 min read
Home office deduction: simplified or regular method?
A worked example for a 180 square foot room in a rented apartment, both ways.
The test first
The space has to be used regularly and only for your business. A desk in the corner of a living room can qualify if that corner is only for work. A dining table you also eat at does not.
Simplified method
180 square feet times $5 is a $900 deduction. No receipts beyond a note of the size, and nothing to recapture if you ever sell a home.
Regular method
If the room is 180 of your 900 square feet, you can deduct 20 percent of rent, renters insurance and utilities. At $1,650 a month in rent that is $3,960 of rent alone. For renters the regular method is usually larger.
Connect the accounts you get paid through and Ashford shows your fourth-quarter estimate in about five minutes. Bookkeeping and estimates are free; filing starts at $24 a month.