J.K. Lasser's Small Business Taxes 2023

CHAPTER 18Home Office Deductions

• Home Office Deductions in General
• Actual Expense or Simplified Method
• Actual Expense Method
• Simplified Method
• Special Business Uses of a Home
• Mobile Offices
• Ancillary Benefit of Claiming Home Office Deductions
• Impact of Home Office Deductions on Home Sales

Alert

At the time this book was published, Congress was considering tax changes that could affect 2022 tax returns and planning for 2023. Check the online Supplement in February 2023 at www.jklasser.com or www.BigIdeasForSmallBusiness.com to see what changes have been enacted and when they become effective.

Today millions of Americans work at home at least some of the time. Computers, smartphones, online meeting options such as Zoom and GoToMeeting, and the internet make it easier and, in some cases, more profitable to operate a home office. The U.S. Small Business Administration reported that before COVID‐19 60.1% of all small businesses with no paid employees and 23.3% of those with paid employees were home‐based. There are no updated statistics, but the percentage of businesses operating from home may now be higher.

As a general rule, the cost of owning or renting your home is a personal one and, except for certain specific expenses (such as mortgage interest, real estate taxes, and casualty losses), you cannot deduct personal expenses. However, if you use a portion of your home for business and you are self‐employed, you may be able to deduct a number of expenses, including ...