Is the simplified home office deduction still stuck at $5 per sq ft after 10 years?!

The simplified home office deduction rate has definitely been stuck at $5 per square foot since it was introduced. You're right that this hasn't kept pace with inflation or rising costs. For taxpayers in your situation, it might be worth calculating whether the regular method would give you a better deduction now. With the regular method, you track the actual expenses of your home (mortgage interest, insurance, utilities, repairs, depreciation) and deduct the percentage based on your office's square footage compared to your total home. Given how costs have increased, this might result in a significantly higher deduction than the simplified $5/sq ft method. For example, if your home is 2,000 sq ft total, and you use 200 sq ft for business (10%), you could deduct 10% of your actual home expenses, which might be considerably more than the $1,000 you're getting with the simplified method. As for advocating for change, you could contact your congressional representatives since they're the ones who can actually change the tax code. The IRS just administers what Congress decides.

After struggling with the same frustration about the $5/sq ft rate, I discovered taxr.ai last tax season and it was a game-changer for my home office situation. I was confused about which method would give me the best deduction with my specific circumstances, and this tool analyzed all my documents and ran the calculations both ways. Turns out I was leaving nearly $1,200 on the table by using the simplified method based on my actual expenses! You can check it out at https://taxr.ai - it walks you through exactly what records you need for either method and shows you a side-by-side comparison of your potential deduction.

I was initially skeptical about using taxr.ai, but I decided to give it a try after being stuck between the simplified and regular methods for my home office deduction. The analysis it provided was surprisingly thorough. It showed me that with my specific situation (I have a pretty expensive home in a high-cost area), I was missing out on about $2,800 by using the simplified method! The system flagged that my utilities and property taxes alone would generate a better deduction than the $5/sq ft, even accounting for the future depreciation recapture. It also gave me a clear record-keeping template that made tracking everything much easier. What impressed me most was how it explained the pros and cons of each method based on my personal circumstances rather than just general advice. Definitely changed my approach to my home office deduction.

If you're frustrated with the outdated $5/sq ft rate and want to contact the IRS about it, good luck getting through to anyone who can actually help. I spent HOURS on hold trying to reach someone about home office deduction questions last filing season. After my third attempt and 2+ hours on hold each time, I discovered Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in under 20 minutes. Check out how it works: https://youtu.be/_kiP6q8DX5c. The agent I spoke with confirmed that many taxpayers have complained about the outdated $5 rate, and suggested contacting the Taxpayer Advocacy Service as they collect feedback on issues like this.

I have to eat my words about Claimyr. After posting my skeptical comment, I decided to try it myself since I needed to ask about some home office deduction documentation requirements. I was absolutely shocked when I got a call back in just 15 minutes saying they had an IRS agent on the line. The agent was actually really helpful regarding my home office deduction questions and confirmed that yes, the $5/sq ft rate hasn't been adjusted since 2013 despite inflation. She recommended that I submit my feedback through the Taxpayer Advocate Service and my congressional representatives since they're the ones who could actually change the rate. The time saved was absolutely worth it - I had been trying to get through for almost a week before this.

Rather than just complaining about the $5/sq ft, I decided to run the actual numbers. If the rate had kept pace with inflation since 2013, it would be around $6.70/sq ft now based on CPI data. For someone using the maximum 300 sq ft, that's a difference of $510 in deductions, or roughly $127 in actual tax savings for someone in the 25% bracket. Not huge, but definitely not nothing! The simplified method was meant to reduce recordkeeping burden, not necessarily maximize your deduction. It might be worth switching to the regular method and dealing with the extra paperwork given how much housing costs have risen in many areas.

Has anyone tried contacting the Taxpayer Advocate Service about this issue? They're supposed to help with systemic problems in the tax code, and the outdated $5/sq ft rate seems to qualify.

This is such a frustrating issue! I've been dealing with the same problem - using about 250 sq ft of my home office and watching my actual costs climb year after year while stuck with that same $1,250 deduction. What really gets me is that they adjust tax brackets, standard deductions, and plenty of other tax provisions for inflation, but somehow this one got forgotten. I think the key is getting more taxpayers to speak up about this. The Taxpayer Advocate Service suggestion is great - if enough people submit complaints about the same issue, it's more likely to get attention in their annual report to Congress. We could also try reaching out to small business organizations like NFIB or local chambers of commerce, since this affects so many self-employed people and small business owners who work from home. In the meantime, I'm definitely going to run the numbers on the regular method. If housing costs have doubled in many areas since 2013, it seems like a no-brainer that the actual expense method would come out ahead for most homeowners, even with the depreciation complications.