Working from home has become a common occurrence across the globe after the outbreak of COVID-19. It also created more home offices in the United States eligible for tax deductions.
How to Claim Tax Deductions for Home Office Space?
The home office tax deductions are primarily for self-employed small business owners. People who do freelance work unrelated to their regular job at home can be eligible.
To qualify for tax deductions, you must meet one of the following criteria:
- Exclusive and regular use
You must regularly use a portion of your apartment, house, condominium, mobile home, or similar structures (e.g., unattached studio, garage, or greenhouse) for your business.
- The principal place for business
Your home office must be where you regularly meet with clients or customers or the principal location of your business.
The tax deductions are based on the space size of your home office. (Photo: TurboTax)
See: Choosing Between Tax Deductions and Tax Credits: Optimizing Your Tax Savings
Home Office Tax Deductions for Tax Season 2023
If you qualify for having a home office eligible for some tax deductions, you should note that the deductions will vary depending on the space size.
The IRS offered a simplified calculation for claiming tax deductions. For 2023, the prescribed rate is $5 per square foot, with a maximum of 300 square feet and a maximum deduction of $1,500. However, the simplified method might not provide the biggest tax deduction. You can use tax preparers such as TurboTax in your unique tax situation.
Find Out: Tax Credits and Deductions for Homeowners 2022 Tax Return
More: When is IRS Accepting Tax Returns 2022? Credits and Deductions Unveiled!
