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westy46
New Member

home office deduction declined

After filling out my home office deduction information like all prior years, it says I don't qualify because my business is showing a net loss.

However, on my Form C, line 31 I'm showing a net profit of $21,500. 

I don't understand why I'm getting the message that I don't qualify for a homeoffice deduction.

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2 Replies
GeorgeM777
Expert Alumni

home office deduction declined

If you have net income from your business, which it appears that you do,  the home office deduction is limited to your net income regardless of the method you use to claim the home office deduction, namely whether you use the Simplified Safe Harbor Method or the Actual Expense Method.  However, a net loss for the business may not be created by claiming the home office deduction.  Thus, if your home office deduction will create a net loss for your business, such deduction is not allowed.  Review the amount you wish to claim for your home office and compare that amount to your net profit from the business to determine whether that expense will create a net loss for the business.  If you decide to post additional information, please do not include any personal identifiable information. 

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home office deduction declined

Did you say that less than 100% of your income from this business is earned from the home office?

 

Look at Line 8 of Form 8829.  That is where the limitation is stated.

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