Expanded Home Office

[SDaniels5]

We built a standalone garage on our property for my husband's business.  It is 100% used for business as a workshop/storage.  We have a small office inside our home we used in prior years and will continue to use.  When entering into TurboTax would I add the garage space as a new office (asset) or edit the existing office to include the additional square footage and cost to build the structure?

[PatriciaV]

Yes, you can deduct expenses for a separate free-standing structure, such as a studio, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or the only place where you meet patients, clients, or customers. You will have to increase the total square footage of your home accordingly to include the separate structure.  

Additional Info:

• Can I take the home office deduction?
• IRS Publication 587, Business Use of Your Home

[SDaniels5]

In addition to increasing the square footage of the office, would I also adjust the cost to include the addition of the garage?  Or would the cost be entered under business assets?  Or both?  

[PatriciaV]

Yes, the separate structure should be added as a new asset for your Home Office with a separate cost. The original cost of the home would not change.