OK, if I go into the field to complete building inspections & come back to my office to complete all the reports & paperwork & administrative work, what percentage of the

[davecrockett]

OK, I have never taken the home office deduction in the past as I did not feel I needed it & was trying to keep things simple, even though I have always used it, even before I was laid off & working for the company as I had no office, but worked out of my office 100% of the time. Now after being laid off five years ago after 40 years & I am on my own completely I am starting to need more help so I am considering going ahead & taking the deduction. If I go into the field to complete building inspections (residential home, commercial, insurance, new construction, etc.) & come back to my office to complete all the reports & paperwork & administrative work, etc. , what percentage of my business is (I am only calling it 100 sf for just my desk & printer, not the whole office size [mezzanine over garage]) conducted at the home office (question). Is it 50% because I work both in the field & back at the office or is it 100% because I do all of the paperwork & phone calls, etc. at the office, or is it some number in between? I just want to do it right & not have any problems, but not pay more than I can afford either.

[PaulaM · Accepted solution]

Look at the question this way: What percentage of time do you spend earning your income from your home office vs fieldwork?

I believe from what you described above, the answer would be 50% or some number less than 100% because you stated that you are out in the field for part of the day. If you spend 1/2 your day in the field and 1/2 at your desk the percentage is 50%.

If everyday is a different amount of time in the field, just figure an average of your time and figure the percentage from that number.

[davecrockett]

Paula, it is a different day every day. Some days are 100% in the field & on the road & even out of town until I return to complete the paperwork, reports, etc. Some days are 110% in the office. Some days are maybe 60% in the field & 40% in the office. As you can see, every day & every week is different. At first I thought I am just going to call it 50%, even if it does take me much more time to do the paperwork, administrative, phone calling, scheduling, reservation making, report writing, marketing, answering e-mails, etc. than the time it takes me to actually perform an inspection. However, upon reading one of the examples it made me think that maybe I am 100% (the first one), then others had me more confused (especially since I have just kept things simple in the past all those years & not used it). I think I am just going to call it at 50% like I first thought. However, if you think that maybe I should use some other number based on my hopeful helpful clarification, please let me know. Thank you again, I really appreciate it.

[PaulaM]

Ok. If you are in the field at all then it has to be less than 100% Use your best judgement if you know that your office work is greater than 50%, make some adjustment north of that. You should take whatever % is the most accurate. Document it for your records.

[davecrockett]

Paula, OK, I just want to do it right & it sounds from reading all the examples, etc. that it might be subjective. I would like to just say 50% & keep it simple. On the other hand, I don't want to cheat myself either now that I need all the help I can get & after not even taking it all those years when I worked out of my office (because the company required it) or even the past few when I just did not take it for simplicity. On one hand I want to just say 50% in the office & 50% in the field. However, after reading some of the examples, well that one make it like it would be 100% because all of my income is generated from the office, even though part of it is completed in the field. Maybe that is like a big company might keep a big office for its employees, even though dependent on the type of business many would spend a great amount of time in the field. It just starts getting more complicated than it seems it should be. Maybe I am the one making it complicated, I don't know. Do you think maybe 60% or 75% might be more accurate? I just want it to be right, but I don't know how to per se' document something like that. I do know that, at least the way I am set up (sort of old fashioned) that if I was not in the office to set things up initially & complete things at the end, there would be no field work. I am just not sure what to say. Thanks again for your input.

[PaulaM]

A log of your field hours would work for documentation. Keep it in your car and enter the time spent there. I cannot tell you what percentage to take but if you think 60 or 75 is representative of your office work, then do take it.

[davecrockett]

Paula, OK I can do that. I can keep a field/office hourly log just like my detailed mileage & expense log book that I have always kept. I just did not do one for time (hours) as I just got the job done. Will that be a problem then for this year (2017) & should I thus then not due the deduction again & forget about it since I did not keep a time log? Thanks for your help, I really appreciate it.

[davecrockett]

Some inspections I do might take me 8 hours of field work & 16 hours of office work. Other inspections might take 30 minutes of field work & 30-45 min of office work. Other inspections might take 2-3 hours of field work & 4-5 hours of office work. When I say office work, I am talking about report writing time, not the additional times used making contacts, scheduling, admin, invoicing, marketing, etc.

[PaulaM]

Keep your records going forward and not worry about 2017. If asked to explain use your 2018 records to explain the typical work that you do.

[davecrockett]

Paula, OK, thank you, I really appreciate it. Did my more detailed explanation of the hour by hour for inspection time vs report writing time, not to include scheduling, reservation making, contacting, invoicing, marketing, etc. make better since with more detail to try to do a better job of pin pointing exactly what it is help?

[PaulaM]

You are welcome 🙂 Your explanation is fine. Keep it for your records.