Bianca operates a wedding planning business from home. She uses two rooms, one for an assistant and one for herself. The total square footage is 500 for the two rooms. The total square footage of the home is 3,800 square feet. She would like to use the simplified option to determine her office-in-home deduction amount this year. Her net income from the business before this deduction is $218,275. What amount may she deduct for her home office expenses if she chooses to use the simplified option?

She has the following expenses:

Mortgage interest $8,745

Real estate taxes $1,836

Home owners insurance $352

Insurance rider for the business $200

Utilities (annual) $3,860

Depreciation deduction $1,395

a) $1,500

b) $2,500

c) $1,948

d) $3,543