Turbotax 2019 incorrectly calculates the Home Office deduction when you move. This happens because it doesn't allow to specify 100% for both home offices on the "Business conducted in home office" screen. It requires to prorate the percentage and this leads to the incorrect calculation of your taxes. Look at this example:
You lived in home 1 for 3 months and then moved to home 2 for the remaining 9 months.
Home Office 1: 3 months
Expenses: $300
Business Conducted: 25%
TurboTax Deducts: $75
Home Office 2: 9 months
Expenses: $900
Business Conducted: 75%
TurboTax Deducts: $675
So, TurboTax allows you to deduct only $750 total for your home offices. But you spent $1200 and you always used one home office at a time with the 100% business conduct there.
Because you never had both offices at the same moment of time and just moved from one home office to another, the correct calculation must be the following:
Home Office 1: 3 months
Expenses: $300
Business Conducted: 100%
TurboTax Deducts: $300
Home Office 2: 9 months
Expenses: $900
Business Conducted: 100%
TurboTax Deducts: $900
Unfortunately, TurboTax doesn't accept this input and shows the error that the total business conduct can't exceed 100%. Actually, it doesn't exceed 100%. It was 100% for 3 months and then 100% again for the remaining 9 months. But TurboTax adds 100% to 100% and wrongly gets 200%.
The following home office usage is 100% - not 200% as TurboTax thinks:
January: Home Office 1 - 100%
February: Home Office 1 - 100%
March: Home Office 1 - 100%
April: Home Office 2 - 100%
May: Home Office 2 - 100%
June: Home Office 2 - 100%
July: Home Office 2 - 100%
August: Home Office 2 - 100%
September: Home Office 2 - 100%
October: Home Office 2 - 100%
November: Home Office 2 - 100%
December: Home Office 2 - 100%
The calculated business conduct by TurboTax is 200% (Home Office 1's 100% plus Home Office 2's 100%)
The correct business conduct is 100%
Please fix this error in the app and send letters to your customers suggesting them to file amended tax returns.
