Documentation relief for home office deductions

Sandy Piper, CPA

The IRS recently published a good news/bad news announcement for those claiming home office deductions.  The good news is the IRS has decided to offer a simpler option for taking a home office deduction.  When you have a home office, the new way of doing things allows you to forgo filling in the 43 lines on Form 8829.  Instead you will be able to fill out a much simpler form, taking a flat five dollars per square foot of office space, which tops out at 300 square feet or $1,500.

The current requirements for claiming a home office deduction will still be in place. A home office must be used regularly and exclusively for business and it will still be limited by your related business income.  All of that said, it has the potential for making record-keeping a less onerous burden.

Now, for everyone breathing a sigh of relief that finally the IRS has done something that makes sense, are you ready for the bad news?  This will not apply until you file your 2013 taxes. 

Huh?