Deductions & credits

The simplified method can make it easier for you to claim the deduction but might not provide you with the biggest deduction. TurboTax makes it easy to determine if you qualify and how much you can write off by asking you simple questions about your unique tax situation.  TurboTax has you covered whether your tax situation is simple or complex. We’ll help you find every deduction you qualify for and get you every dollar you deserve.

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%.

An easier calculation is acceptable if the rooms in your home are all about the same size. In that case, you can figure out the business percentage by dividing the number of rooms used in your business by the total number of rooms in the house.

Special rules apply if you qualify for home office deductions under the day care exception to the exclusive-use test.

• Your business-use percentage must be reduced because the space is available for personal use part of the time.
• To do that, you compare the number of hours the child care business is operated, including preparation and cleanup time, to the total number of hours in the year (8,760).

Assume you use 40% of your house for a daycare business that operates 12 hours a day, five days a week for 50 weeks of the year.

• 12 hours x 5 days x 50 weeks = 3,000 hours per year.
• 3,000 hours ÷ 8,760 total hours in the year = 0.34 (34%) of available hours.
• 34% of available hours x 40% of the house used for business = 13.6% business write-off percentage.