If homeowners and renters carry on business or profession from a part of the home, the expense incurred on the said office -directly or indirectly- are allowed to be deducted from gross income to compute your taxable business income. All persons carrying small business should know how to deduct the expense of carrying out office from a portion of his/her home.
Two methods for home office deduction
There are two options for computing the amount of deduction that can be claimed while computing business income being carried out from a portion of your home. These are :
- Simplified method
- General Method