Home office for wife's freelance business... property tax deductions?

[jmprice86]

When I went to enter our usual property tax deductions of $14887, and then I decided to thoroughly investigate the home office deduction side of things as my wife's income is growing rather substantially. It prompted me to enter the property tax on that section, and now when I go to review it shows (14887+14887-828 = 28946) as property taxes, which is obviously about double the previous year. SO, I'm either screwing things up royally, OR I need to go back to last year's return and re-file. 

Anyway, I'm looking for a little advice. Yes, she 100% works from home and I mark ~6% of the home as her workspace.

[TomK2023]

If the home office is 6% out of the total property then $14,887 (property tax)  x 6% = $893.

[jmprice86]

OK, so I guess my actual question is whether this a legitimate thing? That is, essentially double-counting my property tax on my house because it serves as her home office... I can do that? If so, I'm an idiot for not discovering this tax  hack WAY sooner!

[TomK2023]

No!  "Your home office business deductions are based on either the percentage of your home used for the business or a simplified square footage calculation.

The most exact way to calculate the business percentage of your house is to measure the square footage devoted to your home office as a percentage of the total area of your home. If the office measures 150 square feet, for example, and the total area of the house is 1,200 square feet, your business percentage would be 12.5%."

Based on your scenario: The property tax deduction that you would apply for your home on Schedule A is 94% of the $14,887 total ($13,994).  You can only deduct 6% of that total amount as a home office expense ($14,887 x 6% = $893).  Thus, $13,994 + $893 is your total property tax.

You will make similar calculations for mortgage interest, utilities, etc.  94% to the home + 6% to the office = 100%.

The simplified option for calculation the home office deduction: The rate for the simplified square footage calculation is $5 per square foot, with a maximum of 300 square feet (or $1,500).  E.g., if your wife's home office is only 150sq ft, then 150 x $5 = $750 total office deduction.

Please read this TurboTax Help article for more information: The Home Office Deduction

[jmprice86]

Thanks. I guess the next question is WHY is TurboTax set up to let someone commit that exact error, but that's probably not your domain.