Are you taking your home office deduction?

Are you taking your home office deduction? It’s an important deduction that can reduce your taxable income by hundreds or even thousands of dollars.

Just take the square footage of the space in your home that you use regularly and exclusively for music. This can be a spare bedroom or garage that you’ve converted to a studio, it can be a corner of the room where you have your practice setup, it could be the space in your garage that you store your PA, or it could even just be the footprint of the piano in your living room. It just has to be a space used regularly and exclusively for music.

The old method is to take that square footage and divide it by the total square footage of your house to come up with a percentage. You can then deduct that percentage of your rent or mortgage interest, your utilities, any repairs or maintenance, or any other expenses for keeping up your home.

However, since 2013 there’s a simplified method with can yield an even bigger deduction than the old percentage-of-household-expenses calculation. Just take the square footage of your home office and multiply by $5/sq foot. That’s your deduction.

There’s a lot of old, bad information out there that the home office deduction is ‘a red flag’. That hasn’t been true for decades. Don’t let your tax preparer talk you out of taking this deduction.

Make sure your tax preparer knows about the simplified method, and that they calculate both the simplified *and* traditional deductions, so that they can use the most favorable method (the one that gets you the highest deduction)