Home Office Deduction
Definition
A deduction for the business use of your home, available to self-employed individuals who use a portion of their home regularly and exclusively for business. Two methods: the simplified method ($5 per square foot, max 300 sq ft = $1,500) or the regular method (actual expenses proportional to office area). This deduction is NOT available to W-2 employees working from home.
Example
Your home is 1,500 sq ft and your office is 150 sq ft (10%). Using the regular method with $24,000 in total housing costs, your deduction would be $2,400.