Q. In a previous issue, you stated that you could deduct home office expenses based on the number of rooms in the home. Do you have any authority for this statement?
A. Yes. Typically, home office deductions are based on the percentage of business use (square footage of the business portion of the home divided by the total square footage). But the IRS says in Publication 587, Business Use of Your Home, a taxpayer can base the percentage on the number of rooms if the rooms are about the same size. Say you use one room of an eight-room house for business. The room is 300 square feet out of a total of 3,000 square feet. In this case, the “rooms method” (12.5%) yields a bigger deduction than the square-footage method (10%).
You can find the IRS publication at www.IRS.gov.
A. Yes. Typically, home office deductions are based on the percentage of business use (square footage of the business portion of the home divided by the total square footage). But the IRS says in Publication 587, Business Use of Your Home, a taxpayer can base the percentage on the number of rooms if the rooms are about the same size. Say you use one room of an eight-room house for business. The room is 300 square feet out of a total of 3,000 square feet. In this case, the “rooms method” (12.5%) yields a bigger deduction than the square-footage method (10%).
You can find the IRS publication at www.IRS.gov.
