Follow your favourite podcasts, listen offline and in the car with CarPlay and Android Auto, and always pick up where you left off. Free to try.
This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
In this episode you will learn: - The simplified home office deduction is calculated at $5 per square foot, with a maximum of 300 square feet, capping the deduction at $1,500. - The actual method requires calculating the business-use percentage of the home to deduct a pro-rata share of indirect expenses like mortgage interest, utilities, and depreciation. - A taxpayer can choose between the simplified and actual methods each year, as it is an annual election. - Unused home office deductions due to income limitations can only be carried forward to future years under the actual method; there is no carryover with the simplified method. - A key exam topic is depreciation recapture upon the sale of the home, which only applies when the actual method was used, as the simplified method does not involve a depreciation deduction.
For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep
