Question

Which of the following expenses is not deductible when a taxpayer uses the simplified method of calculating the home-office deduction?

a. business telephone expenses
b. the cost of repairs to the office
c. the cost of cleaning carpeting in the office
d. depreciation

Answer 1

Depreciation is the expense not deductible under the simplified home-office deduction method, as this method provides a standardized deduction without itemizing specific expenses like depreciation.

Step-by-step explanation:

The expense that is not deductible when using the simplified method for the home-office deduction is depreciation.

The simplified method provides a standardized deduction based on the square footage of your home used for business, capped at 300 square feet. Under this method, you multiply the allowable square footage by a prescribed rate; for 2022, this rate was $5 per square foot, providing a maximum deduction of $1,500. The allure of the simplified method is its ease of calculation and reduced paperwork; however, it disallows the deduction of actual expenses such as utilities, repairs, and depreciation. While business telephone expenses, repairs to the office, and cost of cleaning the office are not directly deductible, they may be regarded as standalone business expenses unrelated to the home-office square footage—though these cannot be double-dipped if they're already encapsulated by the simplified rate.