If you are self-employed and work from home, you may be able to deduct some of your home expenses. Here are the basics.

Who can claim it

Generally, the space must be used regularly and exclusively for business, and it must be your principal place of business or a place where you regularly meet clients. Employees generally cannot claim this deduction on their federal returns.

Two ways to calculate it

Simplified method: $5 per square foot of qualifying space, up to 300 square feet.

Regular method: a percentage of your actual expenses, such as rent, mortgage interest, utilities, insurance and repairs, based on the part of your home you use for business.

Which is better?

The simplified method is easier, while the regular method may produce a larger deduction. The regular method also requires more records, and depreciation may affect you when you sell your home.

Keep good records

• Photos or a sketch of the space
• Measurements
• Bills for expenses
• A record of how the space is used

A dining table used by the whole family generally does not qualify. If you are not sure about your setup, ask a tax professional.

Have questions about your situation? Tax rules change and every situation is different, so please talk with a professional before acting on general information. Call Fajardo & Associates at 407-720-7220 to make an appointment.