Business Percentage

Business Percentage
To determine the deduction for the business use of your home, you have to compare the size of
the part of your home that you use for business to your whole house and find the percentage that
is being used for business.
The following are two commonly used methods for figuring the percentage.
• Divide the area (length multiplied by the width) used for business by the total
area of your home.
• If the rooms in your home 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.
For example, if your home measures 2,000 square feet and you are using 500
square feet for your home office, you will be able to deduct 25 percent of
expenses such as rent, mortgage, interest, depreciation, taxes, insurance,
utilities, repairs, etc. There are also other issues to be considered pertaining to
the legalities of deductions. You will have to spend some time familiarizing
yourself with them.