If you own a home-based business, it could soon be a whole lot easier to claim a federal tax deduction. Starting next year, the IRS says those who work from home can use a new, "significantly simplified" form to figure out what to claim for business use of their home office.
That's instead of the 43-line form that's now used to fill out the so-called "home office deduction."
The change applies to 2013 incomes taxes to be filed next year, not those filed this April.
The IRS said the new option, capped at $1,500 per year, will reduce the paperwork and record-keeping burden on small businesses by 1.6 million hours a year. The deduction is based on $5-per-square-foot for up to 300 square feet of home office space.
Existing rules, such as requirement that a home office must be used exclusively for business, still apply under the new option.
It could ease tax preparation headaches for millions. In tax year 2010, the most recent data available, the IRS said nearly 3.4 million taxpayers claimed deductions for home-based businesses.