Our client performs bookkeeping work for her clients. She performs most of her client work at the client’s office. She has about ten clients and spends about 4 hours per client each week. She also has a dedicated office at her home where she does all of her administrative work. The administrative work she performs is at her home office to include billing, record keeping, and training. Additional Facts:

Area of her home used for business – 500 square feetTotal area of home – 5,000 square feetAnnual indirect costsGross income from business - $100,000Deductible mortgage interest - $25,000Real estate taxes - $1,500Utilities - $2,500Cost basis in the house - $350,000Cost basis in the land - $50,000What she wants to know is whether she can deduct expenses related to her home office? What is the estimated amount of the home office deduction?