The IRS states that you can use any “reasonable” method to determine the business percentage. The two commonly used methods for figuring the percentage are:
- Divide the area (length multiplied by the width) used for business by the total area of your home.
Example: You determine you have a home office that is 200 square feet (20 feet x 10 feet). You home is 1800 sq feet. Your business percentage use is 11.11% (200 sq feet / 1800 sq feet).
- If the rooms of your house are all about the same size, you can divide the number of rooms used for business by the total number of rooms in your home.
Example: You use one room in your house for your business. Your house has 4 rooms all about equal size. Your office is 25% (1/4) of the total area of your home. Your business percentage is 25%. Be aware that you might not be allowed to use this method if the percentage you determine is greater than what you would get using the square footage method. You should only use this method if all the rooms in your house are approximately the same size.
No comments yet.