Personal Finance: The New Home Office Deduction Method

With the inception of the Internet, home-based businesses have been growing at high margins and redefined what it means to have a home-based business and related deductions....in recent years the process had become so cumbersome, many people who probably would have benefited, did not take the deduction.  Well, guess what, The IRS has announced a new alternative rule change that simplifies the calculation of the home office deduction for the 2013 tax year. Under the terms of Revenue Procedure 2013-13, which the IRS calls the “safe harbor” method, taxpayers are now able, as of January 1, 2013, to easily calculate their 2013 deduction for their home office; just multiply the square footage of the area of your home that you use strictly for business purposes by the prescribed rate ($5 per square foot) and Voila! You have your tax deduction....up to $1,500.