New Simplified Home Office Deduction

Starting with the 2013 tax return, taxpayers with home based businesses can take a simple approach to determining this deduction. All you have to do is multiply the business square footage by $5 a square foot and that is your deduction. The amount you can take maxes out at $1,500 a year so if there is more than 300 square feet this method might not be beneficial. You can still claim 100% of the mortgage interest and real estate tax as itemized deductions but no depreciation is allowed. The IRS estimates that his will save taxpayers 1.6 million hours a year. See Revenue Procedure 2013-13 for more details.