Here’s how to deduct a home office.

Due to the passing of the Tax Cuts and Jobs Act of 2017, fewer taxpayers will deduct a home office starting in 2018. However, the self-employed can still deduct eligible home office expenses against self-employment income. The space must be used regularly (not just occasionally) and exclusively for business purposes. If, for example, your home office is also a guest bedroom, or your children do their homework there, you can’t deduct the expenses associated with that space.

For those who qualify, you have two options for claiming the home office deduction. First, you can deduct a portion of your mortgage interest, property taxes, insurance, and utilities, as well as depreciation allocable to the office space. This requires calculating, allocating, and saving receipts.

A second approach is to use the “simplified” option. Here, the number of square feet of office space is multiplied by $5. This option is capped at $1,500 per year, based on a maximum of 300 square feet.

With over 20 years of experience in public accounting, Amanda Bechen CPA owns Bechen & Company PC located in Wagner, SD, and can be contacted at 605-384-4200 or www.bechenco.com.