TurboTax Error in Schedule 8829 line 8 (Tentative Sch 2 Profit)

[DaveFrick]

I prepared and filed my 2024 income taxes using Turbo Tax. It appears that Turbo tax made an error in calculating the deduction for my home office on my schedule C. On schedule C, I reported 6,536 as gross income on line 7 and total expenses of 3,710 as total expenses on line 28. This gave me a tentative profit of 2,826 reported on line 29 of Schedule C. On Form 8829 line 8, Turbo tax carried over a value of -3,710. But it should have carried over the value of 2,826 from line 29 Schedule C. (Other items such as gain derived from business use of my home minus any loss from trade or business not derived from the business use of my home are not applicable.) Line 8 of schedule 8829 clearly says to input the amount from Line 29 of schedule C. This amount should be 2,826, not the -3,710 (Sch C line 28) reported by TurboTax, As a result of this error, the allowable operating expenses on line 27 of Form 8829 are reported by Turbo Tax as zero, It should be 948. How do I fix this and file an amend ed return?

[AnnetteB6]

The percent of business use of the home office is missing from the calculation and therefore the result is that the calculation shows a loss for your business.

When you go through the Federal Review of your return, this error should have been flagged so that you could enter the amount on that review screen.  The amount to enter is the percentage of time that you spend in your home office making money for your business.  If all of your time is spent working in your home office for your business, then enter 100%.

You can also make the correction to the calculation using Forms Mode.  Use these steps:

• Click Forms on the top row of TurboTax.
• Go to Form 8829.
• Scroll to the section titled Line 8 Calculation Smart Worksheet and enter your percent of business use of the home office on line B.
• Click Step-by-Step at the top of the screen to go back to the input screens.

Follow the instructions in the TurboTax help article below to get started with your amended return.  Then use the instructions above to fix the home office calculation by entering your percent of business use manually through Forms Mode.

How do I amend my federal tax return for this year?
 

[DaveFrick]

Thank you for trying AnnetteB6 but this appears to be a malfunction in TurboTax.  I am attaching the following screenshots that illustrate what I am experiencing:

Image 1.  Federal smart check shows no errors on return

Image 2.  Business use percentage as input into TurboTax

Image 3. Schedule C showing line 28 and 29 values

Image 4. Form 8829 Showing the correct business use percent (6.1%), is reported but Turbo Tax reports Form 8829 line 8 as Schedule C line 28 (total expenses -3,710).  It clearly should be Schedule C line 29 (Tentative profit 2,826)

How do I fix this to amend my return?

Image 1 Federal Smart Check shows no errors

Image 2 Business Use Percentage input

Image 3 Schedule C

Image 4  Form 8829 uses Sch C line 28 instead of line 29

[DawnC · Accepted solution]

The business use percentage is not the same as the 6.1% in your screenshot above.   The 6.1% is the size of your office compared to the entire home (Line 7 of Form 8829).   TurboTax uses that to determine how much of your home related expenses you can deduct.    This figure has nothing to do with how much of your gross income is eligible to be included on Line 8 of Form 8829.   

The business use percentage is what percentage of your $6,536 gross income was earned in that office.  If you do not manually enter the percentage on Line B of the Line 8 Calculation Smart Worksheet, the business use percentage will be zero.   So, zero percent of your $6,536 is eligible for the deduction.    None of your gross income will transfer over if the business use percentage is set to zero.

See example below - Once you update Line B, your deduction will be allowed.   

  

[DaveFrick]

Thank you DawnC.   That works.  And I appreciate your help.  But I am also pretty frustrated with TurboTax.

So, if I understand correctly, I cannot complete my return entirely in the "Step-by_Step" interface but must enter the "Forms" interface to input the business use percentage.   In the past I have always been able to complete my entire return using the Step-by_Step screens.  How was I supposed to know this information had to be entered in forms?  And if I was missing a critical piece of information, why wouldn't the Error Check notify me and prompt me to add it?   The feedback I got from TurboTax told me I was good to go, even though it knew not all of the information had been provided.