The Tax Advisor, in its August 2013 issue, provided a comparison of the two methods of deducting expenses for office-in-home. Revenue Procedure 2013-13 offers taxpayers a new simplified method of calculating the office-in-home deduction. Here is a comparison of the new ‘Safe Harbor’ method versus the traditional ‘actual’ method.
|Actual Expenses||Safe Harbor|
|Maximum square footage||None||300 sq. ft.|
|Carryover allowed||Yes, to the extent that current year expense exceed current-year income||No|
|epreciation allowed||Yes, to the extent of income||No|
|Maximum annual deduction||None||$1,500|