Home Office Deduction - Simplified vs. Standard

Rather than tracking actual expenses, you may choose to use a formula to calculate your home office deduction. You may change your calculation method each tax year to the method that is most beneficial. The formula set by the IRS is $5 per square feet up to 300 square feet, allowing for a maximum deduction of $1,500. You may still deduct your home mortgage interest and property taxes on Schedule A using this optional method. If you choose to use the standard deduction, you must keep records of your actual expenses and may be subject to depreciation recapture when your home is sold.