Effective for tax years beginning in 2013, the IRS will allow the use of an optional safe harbor method to determine the amount of deductible home office expenses for individuals. The safe harbor is equal to $5 per square foot of qualified home office use, not to exceed 300 square feet. For example, if a taxpayer has a 14 ft. x 16 ft. home office in the taxpayer’s home that otherwise meets the requirements for a deductible home office, the taxpayer could claim a deduction under the safe harbor method of $1,120 (14 x 16 x $5) in lieu of claiming actual expenses. The safe harbor option eliminates the often burdensome substantiation requirements to document actual expenses of the home office throughout the year.
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