A home office deduction is only allowed to be taken in a year where it reduces income.
It is not allowed to increase a loss in a business.
For example, if your business has a profit of $5000 before consideration of a home office deduction, a home office deduction would be allowed up to $5000.
If the business is showing a loss of say -$1000 before consideration of a home office deduction, no home office deduction would be allowed for that year.
You should still enter your expenses for the home office deduction as the expenses will carryover to next year and if there is profit to allow next year's home office deduction and still excess profit, the disallowed expenses from this year can be used next year to reduce next year's business income.
Form 8829, Home Office Expense (see Part IV)
