Is it required to include mortgage interest in the home office expenses or can I just leave in Schedule A if it results in a better deduction?

[DS30 · Accepted solution]

No you are not required to allocate your mortgage interest or property taxes to your home office expense. (You can choose to claim the whole amount on Schedule A as an itemized deduction if that gives you a better overall result.)

However, if you do allocate a portion of your home mortgage interest and property taxes to your home office expense, you will need to reduce the mortgage interest/property tax amount that you are reporting under the personal itemized deduction section (Schedule A) by the amount of mortgage interest/property taxes allocated to your home office. Otherwise you will be getting the benefit of a portion of this home mortgage interest/property tax deduction twice.

Please note that if you are self-employed and claiming this home office expense, these home office business expenses reduce self-employment income, which, in turn, determines how much you owe in self-employment taxes. So claiming the home mortgage interest/property taxes related to your home office as a self-employment business expense may reduce your overall tax liability.

[morinrh]

Thank you for your prompt response.

I wonder if the same is true for Real Estate Taxes?