WASHINGTON, D.C. —
The home office deduction is available for homeowners and renters. Arslan said if the space you dedicate qualifies, then all of the costs associated with maintaining that part of your home -- mortgage interest, insurance, utilities, repairs, and depreciation -- would be deductible. What's not changing is the requirement that a home office be used regularly and exclusively for business. And the key here is "regular and exclusive."
It's the exclusive part that can get folks in trouble. You have to dedicate a specific area of your home to conduct your business or trade or to meet with clients or customers. You do not meet the requirements of exclusive business use if the area of your home is also used for personal purposes. Here's an example from the IRS. Let's say you're an attorney who uses the den or family room to write legal briefs or prepare other documents for clients. The family also uses the room to play games or watch television. The room is therefore not exclusively used for business, so you can't claim the deduction.
To find out what qualifies as a deductible business expense, go to www.irs.gov. Then search for "Deducting Business Expenses" and scroll down to the section on "Business Use of Your Home." The deduction can be limited based on the income of your business or if your business is losing money. All this makes my head hurt even more. Thankfully, there's a short video on YouTube that also explains how to qualify for the deduction. Search for "home office deduction."
I have a personal interest in this change since I have a dedicated space in my home for business work and I qualify for the deduction.
If you want to comment on the simplified home deduction option, you can email firstname.lastname@example.org. Put "Revenue Procedure 2013-13" in the subject line. Or you can mail your comments to the Internal Revenue Service, CC:PA:LPD:PR (Rev. Proc. 2013-13), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044.