If 10% of one's business is attributable to the business office portion of your rent, then why must that 10% amount exceed ALL the expenses that the business has incurred...especially when most all of those expenses are automobile mileage??
I am doing a tax return for a friend who pays $7200 per year for rent in a private residence. 25% of his rent, or$1800, is for space dedicated to his business. 10% of his gross income, or$4800, is attributable to activities performed in that home office.
Now, logic would dictate that the $1800 business rent portion would be deductible, if for no other reason because the income far exceeds the rent. However, for some unexplained reason, the Form 8829 Worksheet states that the income must exceed ALL of the nearly $25,000 business expenses even though most all of that amount is unrelated to the home office. In fact, he would have had to gross over $267,000 to yield $26,700 from the home to cover the business expenses plus his business portion rent. Instead, the $1800 business rent portion becomes a carry over that will most likely never be used. How does that make sense?
