Mark Kohler breaks down the simplified home office deduction: $5 per square foot, up to 300 square feet ($1,500 yearly). A 122-square-foot office nets $610 annually. Direct expenses like furniture and equipment stack on top, and there's no depreciation recapture to worry about.
Chapters
I have a 122 square feet home office times $5, which is a simplified method. That's a $610 deduction. Is this amount to deduct the grand total for the year or should I be multiplying the $610 times 12 months? It is only $610 for the year, but this is why I brought up the auto deduction. This is one of the tricks in tax law planning that the home office, yeah, I want to write off $1,500. You can write off $5 up to 300 square feet, $1,500, no depreciation recapture done. But any specific expenses for the office, like furniture, printers, cameras, lighting, anything that's specific to the office is going to be a write-off on top of that amount. And you just pegged your starting point for the auto deduction. So this really is a powerful thing to get this deduction, even if it's only $610 for the year. Sorry to break that bad news to you, but also let you know the glass is half full. This is a start again for your small business venture that could become a main venture someday. And that's really exciting.
