What is a Business use percentage?

Business use percentage is the calculation method used to determine what portion of home-related expenses can be claimed as tax deductions for Home office purposes. This percentage typically equals the square footage of business space divided by the total square footage of the home. For example, a 200 square foot office in a 2,000 square foot home would have a 10% business use percentage, allowing 10% of qualifying home expenses to be deducted as business expenses.

Related Terms

What are Operating Expenses?

What is a Tax Deduction?

What is Depreciation?

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