Tax break for small home based businesses

Posted on Posted in Tax Planning

The AICPA points out that people in modest homes with small home based businesses will benefit from using the brand new Simplified Home Office Deduction allowed by IRS for 2013. The deduction is capped at $1500 ($5 per square foot for a 300 square foot working space). But if you have a bigger, more valuable home and a larger work space then the standard method still works best. An excel spreadsheet to compare the options is available at http://www.aicpa.org/Publications/TaxAdviser/2014/june/DownloadableDocuments/SimplifiedMethodWorksheet.xlsx. I presume that our tax software will also have this comparison built in for the 2013 tax filing season.

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