How do I figure out the square footage of my home for the simplified method for home business expenses?
In order to figure out the square footage of your home for the simplified method for home business expenses, you must determine the average of the monthly allowable square footage for the year.
When figuring out the average monthly allowable square footage, no more than 300 square feet may be taken into account for any one month. Also, you can only count months in which you had 15 or more days of qualified business use of the home.
Example: You begin using 400 square feet of your home for a qualified business use on July 20th and continue that use until the end of the year. You would add 300 square feet for each month August through December divided by the number of months in the year. You would have an average monthly allowable square footage of 125 square feet ((300 + 300 + 300 + 300 + 300) / 12).
IRS Publication 587 discusses this more in detail.
When figuring out the average monthly allowable square footage, no more than 300 square feet may be taken into account for any one month. Also, you can only count months in which you had 15 or more days of qualified business use of the home.
Example: You begin using 400 square feet of your home for a qualified business use on July 20th and continue that use until the end of the year. You would add 300 square feet for each month August through December divided by the number of months in the year. You would have an average monthly allowable square footage of 125 square feet ((300 + 300 + 300 + 300 + 300) / 12).
IRS Publication 587 discusses this more in detail.
