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Deductions & credits

The Schedule C form and the TurboTax Self-Employed edition are used for those who have their own business or are independent contractors.

If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation.

The home office deduction is available for homeowners and renters, and applies to all types of homes, from apartments to mobile homes.

Generally, deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room (or part of a room) for conducting your business, you need to figure out the percentage of your home's square footage you devote to your business activities. TurboTax will help you with the calculations, you just need the square footage of your home or apartment and the square footage of your office space.

TurboTax will determine if you qualify. See more info below the directions. If you have any other details regarding this question, please feel free to post them in the comment section. 

To enter your home office expense along with other common business expenses:

1.       Open your return.
 (To do this, sign in to TurboTax and select the blue Take me to my return button.)

2.       Type “Schedule C” in the Search box and select the "Jump to" link in the search results.

3.       If this is your first time entering info about your business, you’ll be asked some questions to start. If you have already entered some info about your business, click Edit next to your business.

4.       Proceed through any additional screens.

·         You might want to enter your 1099-MISC, 1099-K, cash, and personal check income from your self-employment before you associate any expenses with your business, but this is not required.

5.       You’ll then reach the deductions section. On the screen that asks what kind of expenses you had, scroll down and select Home office.  You can select any other expense categories that apply to your business as well. Then click Continue at the bottom of the screen.

6.       Now on the Here's your (type of work) info screen, scroll down to the Expenses section, and select Start  next to Home Office.

7.       Now enter the info about your home office.

There are two basic requirements for your home to qualify as a deduction.

Requirement #1 - Regular and Exclusive Use.

You must regularly use the business part of your home exclusively for conducting business.

For example: If you use an extra room to run your online business, you can take a home office deduction for the extra room. However, you cannot also use that space for other purposes, even occasionally.

On the other hand, say you sell items stored and shipped from an online retailer. You may or may not not receive or store items in your office and only use the office every few days to monitor and respond to orders. The rest of the time the office is used for TV and entertainment for your family and friends. This does not qualify for a home office deduction as it fails this requirement as it is not used exclusively for your business.

Requirement #2 - Principal Place of Your Business.

You must show that you use the business part of your home as your principal place of business. If you conduct business at a location outside of your home, but also use your home office substantially and regularly to conduct business, you may qualify for a home office deduction.

You can deduct expenses for a separate free-standing structure, such as a studio, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or the only place where you meet patients, clients, or customers.

For example: You have in-person meetings with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the percentage of your home's floor space used exclusively and regularly for business.

Another example: You sell items at a flea market or farmers market, but you assemble, package, or store the items in a room dedicated to your business. You can deduct your expenses for the percentage of your home's floor space used exclusively and regularly for business. And, the portable shelter and tables you use at the market could also be a deduction.

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