If you will show a profit this year in your business, then you can qualify for a home office deduction when figuring your taxes. Many business owners have someone else doing their taxes for them, but if you are doing them yourself, then this Home Office Expense Worksheet will help you figure out how much you can deduct from your profit.
Here are the steps involved.
photo by baliboro
Calculate the total number of square feet in your home.
Calculate the total number of square feet used for your business (length x width).
Divide the square feet for the business space by the total home square feet.
List the total you spent on mortgage interest.
Calculate your total utilities for the year.
Calculate the total real estate taxes and insurance.
Add those 3 things together.
Multiply that total by the percentage of your home used for business.
Add maintenance and repairs spent on the business portion of your home.
Add the depreciation on the business portion of your home (using the MACRS 39 year method).
Find the total allowable home office expense deduction for your taxes.