Simplified Home-Office Tax Deduction in 2013

The Internal Revenue Service has announced a simplified option that many owners of home-based businesses and some home-based workers may use to figure their deductions for the business use of their homes. The new option, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, reduces the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually. Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home.  Further details on the new option can be found in Revenue Procedure 2013-13, posted on www.IRS.gov. This new option makes it much easier for eligible  taxpayers to claiming the home office deduction.