Question

Roman is a self-employed graphic designer with a qualified in-home office. The office is 360 square feet; the whole house is 2,110 square feet. His mortgage is $1,328 per month, but he doesn't have all his other expenses available. If he decides to use the simplified method, what would be his home office deduction

Answer 1

To calculate the home office deduction using the simplified method, you multiply the allowable square footage (up to 300 square feet) by $5. For an office of 360 square feet, the deduction would be 300 x $5, totaling $1,500 for the year.

Step-by-step explanation:

The student has asked how to calculate the home office deduction using the simplified method for a self-employed graphic designer who works from an in-home office.

With a home office of 360 square feet and a house total of 2,110 square feet, if we use the simplified method of calculating home office deductions, the IRS allows a standard deduction of $5 per square foot of the home used for business, up to a maximum of 300 square feet.

In this case, the maximum deduction would apply, resulting in a deduction of $5 multiplied by 300 square feet.

300 square feet x $5/square foot = $1,500

Therefore, the annual home office deduction under the simplified method would be $1,500.