Read the IRS page on the simplified deduction. You don't enter any household expenses, you take a straight $5 per square foot (maximum of 300 square feet). Your property taxes and mortgage interest are fully deductible on schedule A instead of being split between schedule A (personal) and form 2016 (the business percentage). You don't deduct any business percentage of insurance, utilities or other expenses, just the flat $5 per square foot. Whether one is better than the other will need some thought or testing.
