The IRS rules allow you to use "any reasonable method" to determine the square foot percentage, but all methods ultimately require you to divide a business area by a total area. The most common method starts with finding out the entire square footage for your home. Most people have this number available, but if you do not, you can measure it yourself by measuring the areas (length times width) of each individual room and adding them together. If the rooms in the house are all similar in size, then you only need to count the total number of rooms.
If you are using an entire room as a home office, then the area of the room is your business area. On the other hand, if you have a table set up in the corner of your living room to work at, then you can only count the portion of the living room that you use for business as your business area. Either way, you need to measure the area (length times width) that you use for business purposes to calculate the square footage. If you have similar-sized rooms, you only need to determine how many rooms or portions of rooms you are using for your business.
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Once you have either the total area and business area, or the total number of rooms and the business portion of rooms, all that remains is a simple percentage calculation. For the area method, divide the business area by the total area to get the percentage in decimal form. For the room method, divide the number of rooms or portions of rooms used for business by the total number of rooms to get the percentage in decimal form. Once you have the percentage in decimal form, multiply it by 100 to convert it to percentage form.
For example, 240 square feet divided by 1,200 square feet equals .2; then .2 times 100 equals 20. In this example, the business use of the home is 20 percent.