WASHINGTON – Jan. 22, 2013 – Many real estate professionals do not take the home office deduction because it requires detailed records to distinguish between personal and business use, and it requires a special tax form.

However, starting with 2013 tax returns that will be filed next year, the Internal Revenue Service will allow filers to take a simplified home office deduction of $5 per square foot of home office up to $1,500 annually.

Tax filers will be able to claim mortgage interest, real estate taxes and casualty losses as itemized deductions on Schedule A, and they won’t have to allocate between personal and business use.

Real estate pros who keep the necessary records to claim a home office deduction next year would be wise to calculate their deduction using both methods. They can then use the system that nets them the biggest savings.

Source: Inman News (01/18/13) Fishman, Stephen

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