In 2024, I worked as an independent consultant for 3 months, for which I received a 1099-NEC, worked from my home office 100% and have only $300 of business expense. I plan to use standard home office deduction. However, TurboTax does not allow me to get home office deduction because 'the net profit of your business was zero or less'. This doesn't seem to make sense. How do I fix it? Thank you.
When this happens, it is usually due to a combination of your income attributable to the home office and your other business expenses wiping out any profit that could be reduced by the home office expense.
Go back through the early questions of the home office section and double check your answers. Remember that if you perform all of your work in the home office, then you would put 100% of your time was spent there for the 3 months that you used the home office.
I triple checked all entries - they are correct.
The problem is, when it comes to home office deduction, TurboTax pulls line 28 (expenses) and not line 29 (profit) 0n Schedule C, for Form 8829 Gross Income Limitation. This makes the programs 'thinks' there is a net loss. How do we correct this? Alternatively, can we manually override From 8829 - Gross Income Limitation?
Thank you!
The amount on Form 8829 Line 8 should be the same as Schedule C Line 29. If there is a loss on Line 29 or if your Home Office Expenses (Form 8829 Line 27) are more than the amount on Line 28, you may not have a reportable deduction for the current year.
Unused Home Office Deductions are carried forward to future years to be applied when your business has sufficient profit.
If you are certain the correct numbers are not shown on Form 8829, please post screenshots of both Schedule C Line 29 and Form 8829 Lines 15 - 36.
Thank you.
I'm using the Simplified Method where Form 8829 Line A (Gross Income Limitation) pulls expenses, not tentative profit in Schedule C. How do I fix it?
Form 8829 line 8 is blank.
I am unable to duplicate this. As requested above, can you provide screenshots of Schedule C, Lines 28 and 29? And the Simplified Worksheet from Form 8829. Also, what version of TurboTax are you using? Home Office Deduction
The deduction can also be limited if your gross income from the business use of your home is less than your total business expenses. So, if you have a loss from your home-based business, your home office deduction might be reduced.
Hi @DawnC , thank you. Please see screenshots below. I used Premier - I asked on TurboTax Community and someone mentioned Premier is good.
It looks like the program isn't functioning properly. If you are using the desktop version of TurboTax, you should update the program by using the Online menu option and then Check for Updates. If you are using the online version of TurboTax, you should clear the cache on your computer and reboot. The procedure for that will vary depending on what internet browser you are using, but you can google how to do that for your browser and operating system you are using.
Hi @ThomasM125 ,
I 'checked for updates' and it still didn't fix the issue. I see other posts on TT community - other people are having the same issue.
As an alternative, can I manually override Form 8829 Simplified Worksheet - Line A to $37,760 (Schedule C, Line 29)? Or, should I override it to $38,025 (Schedule C, Line 7 - Gross Income)?
Thank you!
I can't recommend you override an entry, as it will invalidate your TurboTax guarantee and not allow you to e-file your tax return. The matter has been submitted to our qualify review department so a correction should be forthcoming in the near future. If you are using the desktop version of TurboTax, you should do your updates periodically to see if a correction has been installed.
[Edited 2/5/2025 at 12:34 PM PST]
Hi @ThomasM125 ,
I'd really like to keep the TurboTax guarantee and e-file, and get all the deductions I'm entitled to. These are all the reasons why we choose TurboTax.
I look forward to getting your updates on how TurboTax resolves this issue.
Thank you!
Hello, @ThomasM125
I am experiencing the same malfunction on my TurboTax Online program. Do you have any suggestions on how to fix this?
Good to hear this has been submitted for an update. The original poster is correct, the desktop version is pulling line 28 from schedule C into line A of the Simplified Method Smart Worksheet on form 8829 instead of line 29.
I wasn't able to see the earlier posts's screen shots, so attaching mine here in case helpful to getting this resolved. There is no update available as of Feb 7 at 12:10am.
It's not working for me as well. Same scenario with not showing Schedule C Line 29 on Form 8829
Hi @ThomasM125 ,
Hope you are well.
A few people have posted on this thread that they have exactly the same issue. I also see other posts describing the same issues. I 'checked for update' just now, there is no update on this issue yet. Would you mind helping us follow up on this? We appreciate your help.
Thank you!
Same problem here. I am using the online version, not the desktop app.
Following for an update/workaround so I can finish filing!
I am trying to investigate this possible issue. Please take a look at your entries in the Home Office section of your return and verify that you have entered a number on the screen titled Business conducted in home office. It is asking for the percentage of time you spend conducting business in your home office. If this field is left blank, then the program assumes that no business is conducted in the home office and the deduction is disallowed.
If you have verified that this value has been accurately entered and you are still seeing a problem with the negative gross income limitation, then please see the instructions below and submit a diagnostic copy of your tax return. The diagnostic file will not contain personally identifiable information, only numbers related to your tax forms.
Thank you for your help in advance.
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:
If you are using a CD/downloaded version of TurboTax, use these steps:
The title of that screen in Online is "What percentage of your work for Music performing was done at this home office?"
But yes, it is filled in properly and the problem persists.
Token# is 1269861
Thanks!
I am having the same issue.
If I opt for the actual expense calculation method I can get through it and get a deduction.
(Which by the way is really confusing when it comes to mortgage and taxes. I found I had to go ahead and enter in 1098 for mortgage before going through this or it had problems. And the wording is so confusing when it comes to what needs entering in the excess interest or real estate tax deductions.)
But if I select simple home office calculation, I get the message: The net profit for your work was zero or less, which means you can't claim any home office deductions.
This part need work for sure.
token #1269905
Turbo Tax Live Premium online
I found I could successfully go through the home office actual expense calculation but not the simplified calculation.
Update: In my case everything was working as it should. I just did not understand. The simplified method does not allow carry over which means it can't pass through as losses.
I'm having the same issue. The problem is that TurboTax appears to be on form 8829, line 8, Turbotax is incorrectly pulling from Schedule C, line 28, rather than line 29 as it should be. I used the send to agent feature in TT Desktop, token number 193514536484684-19499644.
Think I found a solution. In form 8829, page 2, in the line 8 calculation smart worksheet, line B, I entered 100% (this did not require an override).
Thank you for providing your token numbers. I was able to examine each return and the conclusion is that TurboTax is calculating the Simplified Home Office deduction correctly in each situation. Let me give you some information about how the Simplified Home Office deduction works, and then I will address each token file individually.
For any home office deduction (actual expenses or simplified), the home office deduction is not allowed to take a Schedule C bottom line from a positive profit to a loss. Therefore, before the home office deduction is calculated, the tentative profit or loss of the business is considered. If the number is a loss, then no simplified home office deduction is allowed. However, even with a loss, an actual expense home office deduction can be calculated and carried over to the next year. Carryover is only possible when using the actual expenses, not the simplified method.
The profit/loss number that is used to decide whether the home office expense is allowed comes from Schedule C line 7 minus Schedule C line 28. If the result is positive, then that is the first step to get the simplified home office deduction.
However, the Business Conducted in the Home Office comes into play too. If that number is not entered, then it is assumed to be zero. Zero times the income on Schedule C line 7 minus Schedule C line 28 gives a negative number, which means no home office deduction in the current year (carryover if using actual expense method).
If the Business Conducted in the Home Office percentage is any number less than 100%, then the amount on Schedule C line 7 is adjusted by that percentage before the expenses are subtracted. So even with what you expect to be a positive profit situation, the percentage of business conducted in the home office can drop the income to a level where the profit is negative instead of positive. This means that the simplified home office method is not allowed. Again, using the actual expense method can work, but the home office expense is carried over to a future year.
For each token file, there was a different situation giving you unexpected, but correct, results.
Token 1269905 -- using the simplified method is disallowed because the business is showing a loss. Actual office expenses method could be used and carried over.
Token 193514536484684-19499644 -- There was not a percent of business conducted in the home office entered into the return. After this number is entered, then you can choose the method that gives you the best result. You are most likely going to see a larger impact from the actual expense method instead of the simplified method.
Token 1269861 - This is a case of having a positive profit situation until the percent of business conducted in the home office is factored in. Reducing the income by the percent of business use made it a loss situation with respect to the home office. Therefore no home office expense is allowed with the simplified method, but the actual expense method could be entered and carried forward.
Hi @AnnetteB6 ,
Thank you for helping us look into this issue. And, thank you everyone for your replies.
I use TurboTax Premier and the Simplified Home Office Deduction Method. I have a profit as shown in Schedule C - Line 7 and Line 29. From 'Step by Step', it doesn't ask me % of time I spend conducting my business in home office. However, looking at @kleib323 post, I switched to 'Form', went to Form 8829, Part II, Line 8 Calculation Smart Worksheet, Line B which asks me to enter % of gross income on Line 7 from Schedule C that is from the business use of this home. I entered 100%, and this gives me the simplified home office deduction. @AnnetteB6 can you confirm this is the correct way?
Thank you!
Yes, that is the correct place to enter it.
However, it would be better to enter it through the step-by-step process. You can find the screen asking for that input in the Home Office expense section of your Schedule C. The title of the screen is Business conducted in home office. The wording may be a little different because it is asking for a percentage of time and therefore not seem like the place to enter that number. Ultimately though, the percentage of time is used to calculate the percentage of income.