Julie works as at home and is self-employed. She uses 17% of her home as office space. She has the following housing expenses: Painting of office $600,

Julie works as at home and is self-employed. She uses 17% of her home as office space. She has the following housing expenses: Painting of office $600, mortgage interest total $3,200, property taxes $1,800, utilities $2,400, and depreciation (if 100% business use) of $5,000. Ignoring any income limitations, what is Julie's home office deduction?

O $13,000

O $1,858

O $2,708

O $2,210

Expert Solution

Home office deduction can be calculated the following method:

Actual expense method:

Under actual expense method deduction is allowed for actual expense incurred during the year.

Home office deduction as per Actual expense method

Painting of office (Direct expense)		$600
Mortagage interest (Indirect expense) 3200
Property tax (Indirect expense) 1800
Utilities (Indirect expense) 2400	$7,400

Deductable Business expense (7400x17%)		$1,258

Depreciation - 100% business use
(It is fully deductable as business expense)
Home office deduction		$ 1,858

Julie's home office deduction shall be $1,858.

Junaid answered 1 year ago

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Julie works as at home and is self-employed. She uses 17% of her home as office space. She has the following housing expenses: Painting of office $600,

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