It all depends on the percentage of time spent conducting business in the home office and the combination of other business expenses that you claim in your tax return. AnnetteB explains it perfectly in her post above. As Annette states, "It could be that the combination of income attributable to your home office and the other business expenses are not allowing you to claim any home office expenses". I will use a similar example she uses.
Suppose you have $10,000 worth of profit and 70% of your income was earned working from your home. Now, let's assume your other expenses are $5000 and your home office expense is $3000. Form this, one would assume there is a $2000 net profit but this isn't the case.
- $10,000 X 70%= $7000 from the business use of your home.
- $7000-$5000= $2000 are the home office expenses available to be used for your home
- $2000 - $3000= $0 expenses are not available to be used for home office expense this year but will be carried over to next year.
I realize this sounds harsh but please read IRS Publication 587 and view the worksheet on page 20. Turbo Tax uses the same calculation as this worksheet uses to determine your home office deduction limitation.
@Lulu247
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