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Henrietta is self-employed and would like to know what kind of deduction she could get for...

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Accounting

Henrietta is self-employed and would like to know what kind ofdeduction she could get for her home office. She has gross incomefrom her business of $150,000. Her total home square footage is2,500. The square footage of her office is 150. Total utilities$600. Total home mortgage interest $10,000. Total real estate taxes$4,000.

a. Explain to Henrietta the options for calculating the homeoffice deduction. b. Based on the information provided what wouldbe Henrietta’s deduction? c. What information should you discusswith Henrietta regarding the requirements of taking thisdeduction?

Answer & Explanation Solved by verified expert
4.3 Ratings (893 Votes)
Answer a There are two options available for determining value of deduction Simplified option in which you arent deducting actual expenses Instead the square footage of your space is multiplied by a prescribed rate The rate is 5 per square foot for up to 300 square feet of space The regular more difficult method values your home office by measuring actual    See Answer
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