Per Diem Rates from the U.S. General Services Administration
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Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").
Home Office Deduction - Direct and Indirect Expenses
There two classifications of expenses involved in computing the home office deduction:
- Direct Expenses
- Indirect Expenses
Direct Expenses
Direct expenses directly affect that part of your residence used for your home office and no other part of the residence. No allocation computation is applied to direct expenses; they are 100% deductible.
Examples of Direct Expenses:
- Painting and decorating the office space.
- Maintenance and repairs of the office space.
- Hiring or furnishing maid service to maintain the office space.
Indirect Expenses
Indirect home office expenses are expenses that apply to the entire home and must be allocated to the portion of your home used for your business based on an allocation percentage. This is typically based on the square footage of the office divided by the square footage of the entire residence.
For example, if your residence is 2,000 S.F. and your home office uses 10% of the total square feet of your, you would allocate 10% of the indirect expenses to your home office deduction.
Examples of Indirect Expenses:
- Depreciation of the depreciable basis of your home (if you're a homeowner )
- Electric
- Gas
- Homeowner's association fees
- Homeowner's insurance
- Mortgage interest
- Property taxes
- Rent (if you rent your residence)
- Repairs and maintenance of the exterior structure of your residence (if you're a homeowner)
- Security expenses, such as fees for an alarm system.
- Telephone (if you use a land line, don't include the standard monthly charge.
- Water