A deduction for the business use of your home, calculated using simplified or actual expense methods.
The home office deduction allows self-employed individuals to deduct expenses for the portion of their home used exclusively and regularly for business. You can choose between the simplified method ($5 per square foot, up to 300 sq ft) or actual expenses (percentage of rent, utilities, insurance, etc.).
A 200 sq ft home office in a 2,000 sq ft home = 10% business use. If annual home expenses are $30,000, you could deduct $3,000 using actual method, or $1,000 using simplified.
It depends on your situation. Actual expenses often yield higher deductions but require more recordkeeping. AlphaTax's Home Office Calculator compares both methods.
Yes, the business-use percentage of your internet bill is deductible under the actual expense method.
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