The ABCs of Determining the Square Footage of Your Home Office for Tax Purposes

Posted by on May 24, 2016 · Leave a Comment 

Small business owners, who have a designated office space in which to operate their business, are eligible to claim a portion of the mortgage and other home expenses on their taxes. However, you can only claim this deduction if you know the square footage of your home which is designated as your office space.HomeOfficePhoto

How to Determine Your Home Office Square Footage

In order to determine the percentage you can deduct from your mortgage and other home expenses, simply divide the square footage of your home office space against the total square footage of your home. If your office space is 135 square feet, and your house is 1,400 square feet, this means that you can deduct a total of 9% of the cost of your mortgage and utilities. Using this simplified equation is the best way to get an accurate sense of your percentage.

If the room you use for your home office is identical in size to your other rooms, you can use another method to determine your percentage. Simply divide the number of rooms you use for your business by the total amount of rooms in your house.

Currently, the IRS allows $5 per square foot. However, be aware that you can only claim up to 300 square feet of your home for this purpose.

Home Office Advantage

Qualifying for this deduction can be well worth it as the payoff is significant. However, you cannot use the home office for any other purpose.

If you are thinking about the home office space deduction, please consider it carefully.

Image credit: Blue

Filed under Business, Deductions · Tagged with

About adminjian

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

  • Huddleston Tax CPAs / Huddleston Tax CPAs – Bothell
    Certified Public Accountants Focused on Small Business
    19125 N Creek Parkway #120 / Bothell, WA 98011
    425-242-3836

    Huddleston Tax CPAs & accountants provide tax preparation, tax planning, business coaching,
    QuickBooks consulting, bookkeeping, payroll, offer in compromise debt relief, and business valuation services for small business.

    We serve: Tukwila, SeaTac, Renton. We have a few meeting locations. Call to meet John C. Huddleston, J.D., LL.M., CPA, Lance Hulbert, CPA, Grace Lee-Choi, CPA, Jennifer Zhou, CPA, or Jessica Chisholm, CPA. Member WSCPA.