Question

In the Office and home simplified method is selected what is the amount of Blakes deductions

Answer 1

To qualify for home office deduction one must meet any one of the following requirements:

• home office is principal place of business
• One regularly and exclusively use home office for administrative or management activities for business and have no other fixed location where one perform such activities
• One meet clients or customers at home
• One use a separate structure onr property exclusively for business purposes
• One store inventory or product samples at home, or
• One run a day care center at home.

The home office deduction can be claimed starting in the year 2013. Home office deduction amount must not exceed your gross income from the business use of your home after business expenses .In this method one deduct $5 for every square foot of home office .however deduction is capped at $1500 per year so that it can be used for offices up to 300 square feet.It is good to use simplified home deduction only if deduction one could obtain using the regular method isn't much more than $1,500.It is preferable if home appliance is small. Most people with home offices, particularly those who rent their homes, can qualify for a home office deduction much larger than $1,500.

For example, a person with a 200 square foot home office who pays $1,000 per month in rent and utilities would qualify for a $1000 deduction(200 sq. ft. x $5 = $500) using the Simplified method of deduction.