What is the Simplified method?
The simplified method is an IRS-approved approach for calculating the Home office deduction, using $5 per square foot, capped at 300 square feet, with a $1,500 annual maximum deduction. This method eliminates detailed expense tracking, depreciation calculations, and cost percentage allocations. Taxpayers can switch between simplified and actual expense methods annually based on which produces the greater tax benefits for their situation.
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