I'm an Artist and have two home offices, a Studio/office room indoors and a studio/workshop in an outbuilding. How do I enter both spaces?

[dmichaeldonato]

I have been in my new house since last December, so my first year claiming both spaces.

I paint, draw, store artwork, supplies, do bookkeeping, etc. in the dedicated art studio room inside my home. 

The other building is also used only for my business, too. I paint there as well, do sculptural work, and store supplies for both. I hand make frames for my paintings, so my wood tools for cutting, routing, planing, joinery, assembly and finishing are set up there, as well as other tools for sculptural work.  Essentially, all the louder, power tool required sides of my business. 🙂

It is a separate structure, unattached, several feet from the back door of my house. Both spaces are used solely for my art business. 

I think I enter both separately as two home offices. When I enter the first it asks me for the square footage of the home office to calculate the difference between the house and the dedicated room.  I think it will then help calculate portions of the utilities and property tax based on the % of office space versus total house sq footage.

When I enter the outbuilding into turbotax home and business desktop, is there a way to specify that it is a separate, unattached structure on the property? It is not a garage but has electricity on the same meter as the house, for example. Will I be able to deduct a portion of the utilities as well as a portion of the property taxes I pay for the outbuilding?

Or, is this structure not considered a "home office" as it is in an outbuilding, and does it need to be entered in a different way in turbotax?

Any and all guidance is welcome, as this is my first full year in my new home and not sure how to work this out. 

Thank You!!!

[Molly_K · Accepted solution]

Hi there,

You would enter these separately, as 2 home offices. In the product there is the ability to enter 2 separate home offices. Once you enter the first you will see a landing table for the "home office summary" where you can add a new one. If you use the separate structure exclusively and regularly for your business, you qualify to deduct home office expenses. It does NOT have to be your principal place of business or the place where you meet patients, clients, or customers.

After you answer the first 2 questions for the 2nd home office (outbuilding), you will see the next question "Do any of these apply to your home office? Check the box "This home office is a separate structure" 

When you arrive at the "business conducted in home office" screen you will pro-rate the 100% between the two however you feel allocation is best (say 50-50)

So long as you can say you worked at least 15 days in the one month span on 2016, the product should allow you to take 2 home offices. 

[dmichaeldonato]

Thank you very much for the detailed instructions! I am having trouble finding my way around this program (my mind is mac, this program, not so much!). I keep getting held up thinking I am not winding my way in the right directions through the questions. I made a couple entry mistakes and can't get back to where I need to be. I wanted to ask this question so as to be on the right path to what my situation is here with the two spaces.
Thanks so much and hopefully I will be able to get there and get everything entered.

Does turbo tax do the calculations for the percentage of a utility for the home office? I imagine it does figure out the percentage allowed based on sq footage. But, do you enter the sum total spent on a given utility during the year, or do you enter each months expenditure
 on its own? if you enter the totals spent on a given utility for the year

[dmichaeldonato]

whoops got cut off. and didn't look at spelling.
I guess I enter the total dollars spent, say on electricity, and then it does the calculation for percentage I can deduct, and will divide that between both home offices, correct?

[Molly_K]

Correct, if you are using the actual expenses method, it will take the home office use % (which is based on square footage) and apply it against your total utilities. Just make sure you enter it in the correct column (for entire home) as there is the option for entering utility amounts solely attributable to the home office space.

The simplified method for home office deduction is $5 per square foot (if 12 months use) and therefore will be limited based on one month use. It is advisable to try both and see which gives you a better deduction. With this method you won't have to enter any utility costs, etc.

[dmichaeldonato]

Got it! I don't think I was clear before, though. I have been here since Dec of 2015, not Dec of 2016, so it has been exactly a full year.

[Molly_K]

I see your point regarding a utility bill that covers both spaces. You could calculate this yourself and enter it as a direct cost allocated to the space.

[dmichaeldonato]

I did entry property taxes wrong, though and can't get back to where I did it, and didnt realize till I got to a page saying in big red text that I entered something elsewhere and don't enter it again!
The first question about property tax paid I think was from escrow, which was under estimated for me. I instead entered the full amount I paid, the payment through escrow and the additional payments made to the city. I think I should have only put the escrow payment in and put the total of the additional payments in the second section. But, I have no idea where this was entered. It was obviously in Personal, but can't find where this may have been or how to edit it. Can you help with that, too? Thanks if so, but understand if you can't!

[dmichaeldonato]

Okay, got that part about the utility bill, too. I will do my best to get that straight when I get there. I will try and calculate it myself and allocate to the spaces as necessary so that it is not entered twice, and not entered as only for one space.  Thank you so much!

[Molly_K]

Your property taxes would be located under personal/deductions & credits/your home/property taxes