New Simplified Home Office Deduction Option

Starting this year, there will be two ways to calculate the home office deduction. You can use the new simpler option of deducting $5 per square foot up to 300 square feet for your home office or stick with the traditional calculation by tracking and allocating all your housing expenses between home office and personal use.

If you opt for the $5 per square foot version, you can fully deduct all your mortgage interest & real estate taxes on Schedule A. This differs from the regular calculation, which requires splitting those costs between Schedule A and Form 8829.

With either method, you need to meet all the requirements of home office business use to take the deduction.