Simplified method for home office deduction not allowed

[user17756756823]

Hi, 

My wife runs a small ceramics studio from our home. I want to claim a deduction for the part of the home she is using (170 sqft / 3,600 sqft). TT refuses to d iso saying that the business is at a loss, however the net profit is 1,305$. Opening Form 8829, it appears TT is calculating a gross income limitation of -1,161. Looking at how this should be calculated, my understanding is that (from the IRS instructions):

Line 1. If all gross income from your trade or business is from this qualified business use of your home, figure your gross income limitation as follows.
	A.	Enter the amount from Schedule C, line 29	_____
	B.	Enter any gain derived from the business use of your home and shown on Form 8949 (and included on Schedule D) or Form 4797	_____
	C.	Add lines A and B	_____
	D.	Enter the total amount of any losses (as a positive number) shown on Form 8949 (and included on Schedule D) or Form 4797 that are allocable to the business, but not allocable to the business use of the home	_____
	E.	Gross income limitation. Subtract line D from line C. Enter the result here and on line 1 of the simplified method worksheet	_____

A, should be the gain mentioned above,

B 0 (no capital gain from the business)

C = A

D is zero (no loss from the business reported)

E = C-D = A?

What I am not understanding? Thanks for your help,

Jerry

[AmeliesUncle]

Look through the questions to see if you said that LESS than 100% of her income was from this Home Office (on your picture, line 1 even says if ALL of the income was from your home).  That is the most common reason.

[user17756756823]

Amelie,

Thanks but there is no such question ( asking if all the business was from the home office)?  

Regards,

Jerome

[galaxy-explorer]

Ran into the same issue, even though I answered 100% for the percentage: https://ttlc.intuit.com/community/tax-credits-deductions/discussion/got-incorrect-the-net-profit-for...

[user17756756823]

Thanks, interesting. In my version, I see and answered:

When did [Name] start using this home office for work?
01/01/2025

In 2025, how many months did [Name] use this office at least 15 days?

12

 but I do not have the last question about the percentage of use. See screenshot below:

[user17756756823]

Hi again,

So I went back to the section and did not use the simplified method for calculating the home office deduction. It did work w/o a problem and did ask the question about the % of the business made out of the office. So I guess there is an issue with the way the limitation is calculated in the simplified method. 

Best,

Jerry