form 8829 - 2024 potential error for 'gross income limitation' in simplified method smart worksheet

[clmkc]

Hi! I have a small amount of self employment business income for 2024 ($2256). I have non-home office business related expenses of $710. On form 8829, on the simplified method smart worksheet it is listing -$710 as my gross income limitation. I believe this should instead be +$1,546, however, TurboTax will not allow me to override the -$710. Is this happening due to an error in TurboTax? Thanks!

[AmeliesUncle]

I suspect you said you earned less than 100% of that income due to the home office.  That is usually what causes the weird issue (and even though it is unfair, that is how it legally works if you earned less then 100% of that income due to the home office).

It could also be possible due to selling certain business assets, but I suspect that the less-than-100% is what is causing it.

[RuthR]

I have a similar issue.  I have positive net income and the worksheet is not allowing a deduction.  I made 100% of the income using the home office.  I don't see anywhere that I checked anything to affect this calculation.

[AnnetteB6]

In order to take a closer look at the situation you described and try to offer a solution, it would be useful to have a diagnostic copy of your tax data file.  The diagnostic file will not contain personally identifiable information, only numbers related to your tax forms.  

If you would like to provide us with the diagnostic file, follow the instructions below and post the token number along with which version of TurboTax you are using and what states you are filing in a follow-up thread.

Use these steps if you are using TurboTax Online:

• Sign in to your account and be sure you are in your tax return.
• Select Tax Tools in the menu to the left.
• Select Tools.
• Select Share my file with agent.
• A pop-up message will appear, select OK to send the sanitized diagnostic copy to us.
• Post the token number here. 

If you are using a CD/downloaded version of TurboTax, use these steps:

• Select Online at the top of the screen.
• Select Send Tax File to Agent.
• Click OK.
• Post the token number here.

@clmkc 

@RuthR 

[athomeangie]

I am having the same issue with the online version I just downloaded today. It is showing a negative in the Gross Income limitation, taken from line 28 of schedule C , which is total expenses rather than line 29, which is tentative profit or less.  It should be very similar to last year for me, but it is showing a negative number, which then says I do not qualify for the home office deduction because my net profit was zero or less.  This does seem to be an issue.

I did find that the error is corrected if you go into form 8829, Part II, for line 8 calculation and enter 100% in B. All the calculations are then corrected. I am not sure if a question is missing somewhere or if it was not transferred to the calculations page.

[AmeliesUncle]

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@athomeangie wrote:

I did find that the error is corrected if you go into form 8829, Part II, for line 8 calculation and enter 100% in B. All the calculations are then corrected. I am not sure if a question is missing somewhere or if it was not transferred to the calculations page.

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Did the program ask you what percentage of the income was attributed to the Home Office?  If so, that is what the program used and it seems to be working correctly.

If it didn't ask you that and it arbitrarily put a random percentage there, then it seems to be a program error.

[clmkc]

Thanks for the reply. I went back into TurboTax yesterday and after I input 100% usage for the home office it then calculated the deduction correctly. It had not asked me what % I used for my business, but I manually entered 100% in the worksheet and that appears to have corrected it.

[athomeangie]

I believe this is a program error because last year (and prior years) it asked how much of your business was done at home.  This year it did not ask the question, which is what would go on the form.

[AlyMatt4]

I found the same situation, and the problem with the working sheet line5, it should add line 1 and line4, not line 3 and line4. The description is the gross income from Schedule C, it should be line1, not the percent income on line 3. I talked with the Agent, they won't do anything to correct the mistake. 

[AlyMatt4]

I found the same situation, and the problem with the working sheet line5, it should add line 1 and line4, not line 3 and line4. The description is the gross income from Schedule C, it should be line1, not the percent income on line 3. I talked with the Agent, they won't do anything to correct the mistake. 

[AlyMatt4]

I found the same situation, and the problem with the working sheet line5, it should add line 1 and line4, not line 3 and line4. The description is the gross income from Schedule C, it should be line1, not the percent income on line 3. I talked with the Agent, they won't do anything to correct the mistake. 

[AlyMatt4]

I found the same situation, and the problem with the working sheet line5, it should add line 1 and line4, not line 3 and line4. The description is the gross income from Schedule C, it should be line1, not the percent income on line 3. I talked with the Agent, they won't do anything to correct the mistake. With this obvious mistake, they won't do anything, it is really frustrating.  What is your situation? 

[AlyMatt4]

I found the same situation, and the problem with the working sheet line5, it should add line 1 and line4, not line 3 and line4. The description is the gross income from Schedule C, it should be line1, not the percent income on line 3. I talked with the Agent, they won't do anything to correct the mistake. With this obvious mistake, they won't do anything, it is really frustrating.  What is your situation? 

[AnnetteB6]

The percent of business use of the home office is missing from the calculation and therefore the result is that the calculation shows a loss for your business.

When you go through the Federal Review of your return, this error will be flagged and you can enter the amount on that review screen.  The amount to enter is the percentage of time that you spend in your home office making money for your business.  If all of your time is spent working in your home office for your business, then enter 100%.

You can also make the correction to the calculation using Forms Mode.  Use these steps:

• Click Forms on the top row of TurboTax.
• Go to Form 8829.
• Scroll to the section titled Line 8 Calculation Smart Worksheet and enter your percent of business use of the home office on line B.
• Click Step-by-Step at the top of the screen to go back to the input screens.

[clmkc]

Thank you