My daughter runs an Etsy shop (3D printed resin figures) and did contractor digital designs for another company out of our house. She will file a Schedule C for both businesses. I'm helping her with her taxes. Per Turbotax, she can claim a home office deduction. It would be easier to claim it on her digital design business as she uses the guest room to set up her computer and do her thing. For the 3D resin figures, she uses the butler's pantry to set up her 3D printer and part of the dining room for her inventory and we didn't want to go through all that again.
Originally, we used the simplified method and used the percentage of the guest room/whole house. It gave her a $365 deduction. Yay! However, when we got the PA state return part, it said you can't do simplify method. You have to do actual expenses. She lives with us and doesn't pay any household expenses like rent, utilities, etc. I put in the expenses for mortgage & utilities like electric, garbage, cable, etc. Turbotax calculated that she can take a $1100 deduction for a home office.
Can she claim a home office deduction then? She did do all her digital design work in the guest room. Can she take a federal simple method deduction but no PA home office deduction? Don't think Turbotax let me do that - it said I had to go back to the Federal return & change it to actual expenses.
Also, she started a job with benefits in December in the same home office and no longer does the contractor digital design work. Can she take a home office deduction for the real job? All the employees work from home, there is no "office". We didn't bother putting it in because it was only a month (started in December) but hope to do it for the whole year 2022.
