The IRS posted a new “Summertime Tax Tip” about the home office deduction. The full article can be found here.
Remember that the space has to be used exclusively and regularly for your business. It doesn’t need to be a whole room; if you have a great room and one corner of it is dedicated to your desk and filing cabinets, that corner counts! Just measure out the space that is used for your home office and write down that square footage.
You’ll be able to deduct a portion of your home expenses based upon that square footage number. Take the total square footage of your home and divide it by the square footage of your home office space. If you have an 1,800 square foot home and your home office measure 9×10, or 90 square feet, then your home office accounts for 5% of your home. You can now deduct 5% of your utilities, your rent or mortgage interest, your property taxes, and more. This IRS put together all the rules in Publication 587, Business Use of Your Home. Enjoy 🙂
Deb Howard Greenleaf, EA, CEO and Principal, of Greenleaf Accounting Services provides virtual accounting and bookkeeping services and specializes in financial management to consultants, coaches, solo professionals, and other small business owners across the US. Deb is an Enrolled Agent (EA)—an IRS-licensed tax professional—and specializes in small businesses and entrepreneurs filing Schedule C or as an LLC. As an Advanced Certified QuickBooks ProAdvisor, Deb spends her day in QuickBooks Online and specializes in providing QBO support.