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Level 2
April 12, 2022
Question

Home office deduction change

  • April 12, 2022
  • 1 reply
  • 0 views

I've been using TT Home and Business.  I started my own small business in 2020 and thought that my home office would meet requirements for home office deductions, but after learning more, I decided that my office won't satisfy the "exclusive" requirement.  Both my 2020 and 2021 returns have been filed with home office status and appropriate forms, but for both years there was no home office deduction (0 on line 30 of Schedules C).  When saving my 2021 return I noticed that a depreciation deduction is showing up on Form 8829 worksheet.  I want to abandon the home office status for 2020 and 2021 and I don't want to be surprised with a "depreciation recapture" capital gain tax when I sell my house in the future.  Even though I did not receive any home office deductions, should I file amended returns for both years to document the absence of a home office?  Thanks   

1 reply

Level 15
April 12, 2022

Yes, you will want to amend your return if you had a depreciation deduction on your prior year returns.  As you stated, this will keep you from needing to recapture anything and it will be accurate reporting. 

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BCARAuthor
Level 2
April 16, 2022

Ok, thank you.