When figuring the amount you can deduct for the business use of your home, you can use the entire amount of expenses attributable solely to the portion of the home used in your business. The amount you can deduct for expenses attributable to the whole house depends on the percentage of your home used for business. To figure this percentage, you may divide the number of square feet used for business by the total square feet in your home. Or, if the rooms are approximately the same size, divide the number of rooms used for business by the total number of rooms in your home. You figure the business portion of your expenses by applying this percentage to the total of each expense. If you are a qualified day-care provider who does not use any area exclusively for day care, your business portion is further limited by the ratio of the number of hours the area is used exclusively for business to the total number of hours the portion was available for any use.
Thus your office is 120sq ft / 2230 sq ft home = 5.4% - that means you may deduct 5.4% of your common utilities, insurance, etc.
use Form 8829 to figure your business-use-of-the-home deductions and.
Publication 587 has detailed information on rules for the business use of your home - www.irs.gov/pub/irs-pdf/p587.pdf