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This includes figuring out the percentage of your home’s total square footage allotted to the workspace. There are two strategies to calculate the deduction: the simplified method and the regular method. A deduction of $5 Step Formula per square foot of the workspace, up to 300 square feet, is permitted under the simplified method, leading to a most deduction of $1,500. Requires detailed documentation of precise expenses like utilities, rent or mortgage interest and depreciation, and allocates them proportionally based on the workspace dimension. While the simplified technique is much less time-consuming, it may not present as much benefit because the regular technique for those with increased bills. Accurate record-holding is crucial. Taxpayers ought to retain receipts, utility payments and other documentation to assist their claims. And remember, the workspace should meet the IRS’s exclusive-use and common-use requirements to qualify, and improper claims might set off an audit. Unless Congress amends the TCJA, the rules limiting worker deductions will expire after 2025. This change could restore the flexibility for staff to deduct unreimbursed work from home system expenses, together with residence office costs.