According to the On-Demand Guidance for renting out part of your home,
If you rent part of your property, you must divide certain expenses between the part of the property used for rental purposes and the part of the property used for personal purposes, as though you actually had two separate pieces of property.
You do not have to divide the expenses that belong only to the rental part of your property. For example, if you paint a room that you rent, or if you pay premiums for liability insurance in connection with renting a room in your home, your entire cost is a rental expense.
You can use any reasonable method for dividing the expense. The most common methods for dividing an expense are based on the number of rooms in your home or based on the square footage of your home.
TurboTax offers to calculate the allocated expenses for you if you check the Yes box on the page "Let Us Calculate Your Expense Deductions for You" and enter your calculated Rental Use Percentage. Under Income & Expenses, you are prompted to Enter Common Expenses (ie: expenses shared with the entire home). If you missed this question, return to the Property Profile and work through that section again.
The IRS considers rental activities as a passive activity and does not allow the home office deduction on Schedule E. You do have the option of reporting office expenses (supplies & services) as a Rental Expense. The home office deduction remains a hot topic for the IRS. Use your best judgement.
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