In the past, complex forms have made it hard to claim a home office deduction with the Internal revenue Service. The tax agency was quick to scrutinize these claims for issues. However, that process will be much simpler when filing tax forms in 2014.

Home office deduction made easier

The process of deducting a room as an office in a home is really complicated, according to the Internal Revenue Service. That is why the process will be made easier.

The Internal Revenue Service reports that 3.4 million Americans deducted home offices as part of their taxes in 2010.

Section 280A of the tax code allows working class individuals to deduct expenditures for an office in a private home if the room is: „The principal place of business of a trade or business, as a place where you meet with patients, clients, or consumers in the normal course of your business, or your work as a worker, but only if the use of the home office is for the benefit of your employer.“

Used to be too hard

Taxpayers had to fill out the 43-line Form 8829 to determine what part of the home is actually deducted for the business. This was really complicated and took a ton of work.

Working class individuals can take up to $1,500 in educations and $5 for every square foot of space for the deduction in 2014.

The Internal Revenue Service claims the form will even be much simpler to understand and to fill out. The IRS states the move will save small company and entrepreneurs 1.6 million hours a year in paperwork and record keeping.

Praise for the tax code change

The change has gotten a ton of good press, specifically from the National Association for the Self-Employed.

„This is terrific news for the 52 percent of all small business that work from home, who fight every day to meet their bottom lines while continuing to contribute to the economy,“ said Kristie Arslan, who heads the group. „The previous calculation for the deduction was cumbersome and time consuming for America’s smallest business and year after year hard-earned dollars were left on the table.“

The first returns to include the change will be 2013 returns filed in 2014.

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