Simply, starting in tax year 2013, the IRS will allow you to claim $5/square foot of office space, up to a maximum of 300 square feet. This means the maximum deduction if you use the new method will be $1500 per year. The rules that it has to be dedicated office space that is regularly used as an office still apply, and you can’t claim more in the deduction than your business made.
In many cases you may get a higher deduction by using the old method, but at least this will give those who don’t want to fill out the Form 8829 (which is 43 lines!) a different option. Most of this doesn’t apply if you have an S-Corp and file a corporate tax return. For those of you that don’t use an S-Corp, I found this book for you to look at: How To Start And Run Your Own Corporation: S-Corporations For Small Business Owners.
For those of you that want to read the official release from the IRS: IRS Announces Simplified Option for Claiming Home Office Deduction Starting This Year; Eligible Home-Based Businesses May Deduct up to $1,500; Saves Taxpayers 1.6 Million Hours A Year - Even their article titles are complicated! Additionally, you can also read the actual tax code for the new rules here: 26 CFR 601.105