Question
Neville is self-employed. He owns a home that qualifies as a home office. The office is 270 square feet and the entire house is 3,000
Neville is self-employed. He owns a home that qualifies as a home office. The office is 270 square feet and the entire house is 3,000 square feet. In 2020, he earned a net profit of $34,000 from the business before deducting any home office expenses. During the year, he paid $8,468 of mortgage interest, $1,752 of property taxes, $524 of homeowner's insurance, and $3,812 of utilities. The home was purchased in 2012 for $270,000 (excluding the cost of the land) and Neville started his home-based business in that same year. What is the amount of the deduction for business use of an office in the home for 2020 assuming Neville uses the actual expense method (be sure to consider expenses from all 3 tiers)?
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