Does the total sq footage for calculating home office deductions only include heated areas? Or would unheated areas, eg-basement, enclosed

[J888]

Also, I am in an apartment, but I don't think that matters.

[LenaH]

No, the home office deduction does not only include heated areas.

If you're self-employed, housing-related expenses such as rent, utilities, and repairs for the portion of your home or rental that you use to run your business are allowable expenses under the home office deduction.

You may be able to claim the home office deduction if your office is:

• Used regularly and exclusively for your business, and
• Is your principal place of business (both conditions must apply).

When you enter your home office information in TurboTax, you will be prompted to answer questions to determine if you can claim the deduction and how much the deduction is worth. You’ll need information like the square footage of your residence and the rooms you worked in.

[J888]

Hi there,

I'm sorry if my question wasn't clear--I'm asking what portions of my apartment do I include in the calculation of the total square footage when I am calculating a home office deduction--eg. do I include the square footage of the unheated basement, unheated enclosed porch, open porch?  thank you

[ToddL99 · Accepted solution]

Use the "habitable" square footage for your total square footage, i.e. those areas of the home that you are able to live and work in.

Areas that cannot be used for "living and working" are not relevant to determining the pro-rata costs of a home office. These would include areas that are not heated or air conditioned, or lack electricity and water.

[J888]

Thanks so much,ToddL99!  Your response is the logical one, but for some reason I haven't found it that explicitly stated elsewhere.

[JoannaB2]

No. The area used exclusively for business whether it's heated or unheated is deductible as actual expenses which also includes, mortgage and property tax or rent, repairs, and deprecation of the home (if owned the home).  The expenses are reported on Form 8829 and is transferred over to line 30 of Schedule C.  The business use of home deduction can't be used for business losses.

[J888]

Thank you, JoannaB2.  That makes sense.  The area I use for exclusively business is heated and habitable--Although perhaps unclearly written, I was asking about what areas to include when I calculate the total square footage.