For those who work from home, there is a new option for claiming the home office deduction which makes the process simpler. Figuring out the deduction for using you home as a business used to be a little more complicated, but starting this tax year, the new option will help you maintain records, and make the claim process easier. It doesn’t change the eligibility requirements for the deduction though, so you should review the qualifications before filing.

In order to take a deduction for a home office, you must have a designated area of your home that is used exclusively for business purposes, which are conducted on a consistent basis. Additionally, your home office must be:

• The main location of the business
• Where clients and customers conduct normal business operations
• Separate from you home, such as a studio, garage, or barn.

The home office deduction includes specific costs related to your home, such as rent, mortgage interest, utilities or taxes. The total amount of these expense that you can deduct relies on how much of your home is used for business purposes, typically in percent form.

This year, the simplified option will allow you to claim the deduction instead of having to itemize the expenses individually. The home office deduction is figured using a rate of $5 per allowable square footage of your office, up to a max of 300 sq. feet and $1,500 per year.

If your income from the business is less than the total expenses, the amount claimed through deduction is limited. Self-employed owners who want to calculate actual expenses for should use Form 8829, Expenses for Business Use of Your Home, in order to get a total figure of your deduction. Whether you chose the simplified option or the actual expense method, you’ll need to file Schedule C, Profit or Loss from Business, to claim the deduction.

Also, remember that you must meet certain criteria if you are a work at home employee of another business. In addition to the qualification above, it must also benefit your employer for you to work from a home office.