For actual-expense method for home-office deduction under Schedule C, what additional substantiation is required beyond Form 8829? Is audit risk increased?

[fadum]

Under Schedule C using the actual-expense method for home-office deduction requires more “substantiation” than the simplified-deduction method.  What additional substantiation is required other than completing the Form 8829?  Does using actual expenses increase the audit risk?  Also, I understand it is allowed to switch methods from year to year.  Does switching to actual expenses from simplified deduction in previous year(s) increase the audit risk?  Thank you.

[PatriciaV · Accepted solution]

No, your audit risk is not increased by claiming any Home Office Deduction, simplified or actual. Switching from one method to the other is not an audit risk, either.

As with all tax deductible expenses, you need proof that includes the vendor, date of purchase, amount, and what was purchased. In most cases, this will be a receipt from the vendor or a monthly bill from a utility company.

[fadum]

Thank you!!!