{"id":3596,"date":"2023-05-17T15:00:00","date_gmt":"2023-05-17T15:00:00","guid":{"rendered":"https:\/\/www.irstaxapp.com\/?p=3596"},"modified":"2023-06-29T02:47:31","modified_gmt":"2023-06-29T02:47:31","slug":"depreciation-calculator-for-home-office","status":"publish","type":"post","link":"https:\/\/www.irstaxapp.com\/depreciation-calculator-for-home-office\/","title":{"rendered":"Depreciation calculator for home office"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large is-resized\"><picture><source srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2020\/07\/Home-Office-Depreciation-Calculator-1-600x343.webp 600w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2020\/07\/Home-Office-Depreciation-Calculator-1-300x171.webp 300w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2020\/07\/Home-Office-Depreciation-Calculator-1.webp 700w\" sizes=\"(max-width: 1120px) 100vw, 1120px\" type=\"image\/webp\"><img src=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2020\/07\/Home-Office-Depreciation-Calculator-1.png\" height=\"640\" width=\"1120\" srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2020\/07\/Home-Office-Depreciation-Calculator-1-600x343.png 600w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2020\/07\/Home-Office-Depreciation-Calculator-1-300x171.png 300w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2020\/07\/Home-Office-Depreciation-Calculator-1.png 700w\" sizes=\"(max-width: 1120px) 100vw, 1120px\" class=\"wp-image-3613 sp-no-webp\" alt=\"home office depreciation calculator\" decoding=\"async\" loading=\"lazy\"  > <\/picture><\/figure>\n\n\n\n<p>If you carry business or profession from a portion of your home, you are allowed home office tax deduction as also depreciation on the property. Please read <a href=\"https:\/\/www.irstaxapp.com\/home-office-deduction-calculator\/\">Home Office Deduction Calculator<\/a>. If you are using Form 8829, after calculating your deduction for the business use of your home (Part II), you can figure your depreciation deduction in Part III. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_62 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6629bb63c8137\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6629bb63c8137\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.irstaxapp.com\/depreciation-calculator-for-home-office\/#Home_office_depreciation_calculator\" title=\"Home office depreciation calculator\">Home office depreciation calculator<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.irstaxapp.com\/depreciation-calculator-for-home-office\/#Method_of_computing_depreciation_used_in_the_calculator\" title=\"Method of computing depreciation used in the calculator\">Method of computing depreciation used in the calculator<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.irstaxapp.com\/depreciation-calculator-for-home-office\/#Home_office_depreciation_factor-2022\" title=\"Home office depreciation factor-2022\">Home office depreciation factor-2022<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.irstaxapp.com\/depreciation-calculator-for-home-office\/#Example_for_depreciation_computation\" title=\"Example for depreciation computation\">Example for depreciation computation<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Home_office_depreciation_calculator\"><\/span>Home office depreciation calculator<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<iframe loading=\"lazy\" src=\"https:\/\/gsheetpress.com\/calculator?id=1593760821357\" name=\"calculator\" frameborder=\"no\" width=\"100%\" height=\"700px\" align=\"center\"><\/iframe>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Method_of_computing_depreciation_used_in_the_calculator\"><\/span>Method of computing depreciation used in the calculator<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>You need the following to compute the depreciation on home office<\/p>\n\n\n\n<ol>\n<li><strong>Basis in the Home on the Date<\/strong>, you started using a portion of your home as Office. The basis usually include cost plus the cost of any improvements to the property.<\/li>\n\n\n\n<li><strong>The Cost of the Land<\/strong>.. This has to be reduced from the basis<\/li>\n\n\n\n<li><strong>The Date of start of Office<\/strong><\/li>\n\n\n\n<li><strong>The Percentage of homes used for business purposes-<\/strong><\/li>\n\n\n\n<li><strong>The Depreciation Factor<\/strong>\u00a0(from the\u00a0<a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/i8829.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">Instructions for Form 8829<\/a>): 2.461%, which is given below for 2022 (it has been same since 2019)<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Home_office_depreciation_factor-2022\"><\/span>Home office depreciation factor-2022<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As you can see, the depreciation on the home office requires a declared factor that is given in the instruction for Form 8829 to figure the allowable expenses for business use of your home on Schedule C (Form 1040) and any carryover to 2023 of amounts not deductible in 2022.<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-regular has-medium-font-size\"><table class=\"has-black-color has-text-color has-background\" style=\"background-color:#e7f5fe\"><thead><tr><th><strong>IF you first used your home for business in the following month in 2022&#8230;<\/strong><\/th><th><strong>THEN enter the following percentage on line 41<\/strong><\/th><\/tr><\/thead><tbody><tr><td>January<\/td><td>2.461<\/td><\/tr><tr><td>February<\/td><td>2.247%<\/td><\/tr><tr><td>March<\/td><td>2.033%<\/td><\/tr><tr><td>April<\/td><td>1.819%<\/td><\/tr><tr><td>May<\/td><td>1.605%<\/td><\/tr><tr><td>June<\/td><td>1.391%<\/td><\/tr><tr><td>July<\/td><td>1.177%<\/td><\/tr><tr><td>August<\/td><td>0.963%<\/td><\/tr><tr><td>September<\/td><td>0.749%<\/td><\/tr><tr><td>October<\/td><td>0.535%<\/td><\/tr><tr><td>November<\/td><td>0.321%<\/td><\/tr><tr><td>December<\/td><td>0.107%<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\"><strong>Depreciation Factor<\/strong>&nbsp;(from the&nbsp;Instructions for Form 8829):<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Example_for_depreciation_computation\"><\/span>Example for depreciation computation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>David started using a home office in May 2022. Other relevant data are :<\/p>\n\n\n\n<ul>\n<li>Basis in-house =$300,000. <\/li>\n\n\n\n<li>Land cost: $30,000. <\/li>\n\n\n\n<li>Improvements to property: $20,000<\/li>\n\n\n\n<li>Area of office: 120 square feet<\/li>\n\n\n\n<li>Area of the home is 1,200 square feet.<\/li>\n\n\n\n<li>% use of home for office = 120x 100\/1200=10%<\/li>\n<\/ul>\n\n\n\n<p><strong>Adjusted basis<\/strong> <strong>of house<\/strong> = $270,000 ($300,000 \u2013 $30,000) <\/p>\n\n\n\n<p>Depreciation Factor for the month of  May= is 1.605% .<\/p>\n\n\n\n<p>That means the<strong> total deprecation<\/strong> for the house for the year 2022 equals:   $270,000 x 1.605% = <strong>$4333.5<\/strong><\/p>\n\n\n\n<p class=\"has-very-light-gray-background-color has-background\">David can claim a deduction on account of depreciation for his home office in 2022 would be: <strong>Total depreciation x % of business use<\/strong>, which comes to $4333.5 x 10% = <strong>$433.35<\/strong><\/p>\n\n\n\n<p>This amount is carried back to <strong>Part II of Form 8829<\/strong> to complete the <strong>business use expense deduction.<\/strong><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you carry business or profession from a portion of your home, you are allowed home office tax deduction as also depreciation on the property. Please read Home Office Deduction Calculator. If you are using Form 8829, after calculating your deduction for the business use of your home (Part II), you can figure your depreciation [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3613,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[54],"tags":[1379],"amp_enabled":false,"_links":{"self":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/3596"}],"collection":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/comments?post=3596"}],"version-history":[{"count":3,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/3596\/revisions"}],"predecessor-version":[{"id":7313,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/3596\/revisions\/7313"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media\/3613"}],"wp:attachment":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media?parent=3596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/categories?post=3596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/tags?post=3596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}