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You can calculate the square footage of your home office, multiply that figure by $5 per square foot (up to 300 square feet) and claim it on your personal tax return (using Schedule C of Form 1040).
Figuring out depreciation expense You can only take depreciation expense linked to the home office portion of your home. To calculate the business percentage, divide the area of your home office (in square feet) by the total area of your home (in square feet). The result is your business percentage.
Purpose of Form Use Form 8829 to figure the allowable expenses for business use of your home on Schedule C (Form 1040) and any carryover to 2013 of amounts not deductible in 2012. You must meet specific requirements to deduct expenses for the business use of your home.
For example, if you have an eight-room house and use one room as an office, your business use percentage will be 1/8 or 12.5 percent. Alternately, if your home office was 168 square feet and your home was a total of 2000 square feet, your business use percentage will be 168/2000 or 8.4 percent.
Filling Out the 8829 Form Line 1: First, enter the square footage of your home office that you use exclusively for business purposes. Line 2: Then enter your homes total square footage. Line 3: Divide Line 1 by Line 2 and multiply by 100 to find the percentage of your home that you consider to be your home office.
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In prior years, the software used the 2.564% (correctly) as stated in the IRS form. But this year (2021) is different, a different % is used in the software, although the 2021 IRS Form 8829 STILL indicates 2.564% should be used.
Accessed Oct 14, 2022. The depreciation youre required to take in home office deductions is subject to capital gains tax when you sell your home. For example, if you own your home, use 20% of it as a home office and deduct depreciation, 20% of your profit on the homes sale may be subject to capital gains tax.

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