The home office deduction is a tax deduction that allows self-employed individuals and small business owners to claim a portion of their home expenses as a business expense on their tax return. To qualify for the home office deduction, you must use a designated area of your home exclusively and regularly for your business. This means that the space must be used only for business purposes and must be used on a regular basis.

To calculate the home office deduction, you will need to determine the percentage of your home that is used for business. For example, if your home office is 10% of the total square footage of your home, you can claim 10% of your eligible home expenses as a business expense on your tax return.

To claim the home office deduction, you will need to complete Form 8829, Expenses for Business Use of Your Home. This form will ask you to provide information about your home office, including the square footage of the space and the percentage of your home that is used for business. You will also need to provide information about your eligible home expenses, such as mortgage interest, property taxes, insurance, utilities, and repair and maintenance costs.

It's important to note that the home office deduction is subject to certain limits and restrictions. For example, you cannot claim a deduction for expenses that are more than the income from your business, and you cannot claim a loss for your home office. You should also be aware that the home office deduction may be disallowed if you are claiming other business-related deductions, such as the self-employment tax deduction or the qualified business income deduction.

In summary, the home office deduction allows self-employed individuals and small business owners to claim a portion of their home expenses as a business expense on their tax return. To qualify, you must use a designated area of your home exclusively and regularly for your business. To claim the deduction, you will need to complete Form 8829 and provide information about your home office and eligible home expenses. It's important to be aware of the limits and restrictions that apply to the home office deduction. If you have any questions or concerns, it's a good idea to consult with a tax professional like Davis Accounting & Tax.