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Rita owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home (500 square feet) where she
Rita owns a sole proprietorship in which she works as a management consultant. She maintains an office in her home (500 square feet) where she meets with clients, prepares bills, and performs other work-related tasks. Her business expenses, other than home office expenses, total $5,820. The following home-related expenses have been allocated to her home office under the actual expense method for calculating home office expenses. Also, assume that, not counting the sole proprietorship, Rita's AG1 is $62,200. Rita itemizes deductions, and her itemized deduction for non-home business taxes is less than $10,000 by more than the real property taxes allocated to business use of the home. Assume Rita's consulting business generlated $15,550 in gross income. Note: Leave no answer blank. Enter zero if applicable. . What would Rita's home office deduction be if her business generated $10,550 of gross income instead of $15,550 ? (Answer for oth the actual expense method and the simplified method.)
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