If your business is eligible for the home office deduction but you’ve never taken advantage of it due to the inconvenience and time required for record keeping, you may be interested in the new, simplified option for home office deductions.

The IRS announced on January 15 that they were making a new optional deduction available, which will reduce the paperwork required and save small business owners a combined estimated 1.6 million hours annually.

The new option is capped at $1,500 per year, based on $5 per square foot up to 300 square feet.

In the past, taxpayers claiming home office deductions were required to fill out a 43-line form (Form 8829) with complex calculations of allocated expenses, depreciation, and carryovers of unused deductions. The form for the optional deduction is significantly simplified.

Although homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes, and casualty losses on the home as itemized deductions, and they don’t need to allocate between personal and business use.

The new simplified option is available starting with the 2013 return that most taxpayers file early in 2014. For more information, see Revenue Procedure 2013-13.