How this number is made
The IRS simplified home-office method is $5 per square foot, on at most 300 square feet, so the maximum is $1,500. The space has to be used regularly and exclusively for the business. Employees generally cannot take this.
- Measure only the space that qualifies, not the whole apartment.
- If you are above 300, the deduction stops at 300 under this method. The regular method is a different form.
Formula
Deduction = $5 × square feet, and square feet cannot exceed 300.
Worked example
With the figures already in the form, simplified deduction is $750.
Questions
Can a W-2 employee use this?
Generally no, under current federal rules for unreimbursed employee expenses. It is aimed at self-employed people.
What is the regular method?
A share of actual rent, utilities, and depreciation. It can be larger and it can have depreciation recapture later. This page is only the simplified method.