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harsteve007
Returning Member

What is the correct way to answer: "what percentage of your work was done at this home office?"

 

The hint and other answers I found are ambiguous:

"The IRS wants to know what percentage of your business's income is associated with your home office usage.

 

If all of the income for this work is generated in your home office, enter 100%. If you split time between your home office and visiting clients or attending trade shows, enter the percentage of time you actually work in your home office.


Example: Pat spends 80% of their time in their home office ordering parts, preparing them for resale, packaging, and performing administrative work for their computer parts business. The other 20% is spent selling parts at local flea markets. Because the flea market counts as another business location, Pat would enter 80% as the percentage of income they earn from their home office.""

 

In the first sentence, it says it's directly linked to the percentage of the "income" associated to the home office, but in the example, it says it's linked to the percentage of the "time" worked.

 

At the same time, some other answer I found answered by Experts suggests that it's linked to the percentage of the "income" generated:

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/i-m-trying-to-deduct-my-homo-off...

 
What if in a situation, someone spent 50% work time at home office , 50% of the time elsewhere, but the 50% work time at home office generated 100% of the income?
 
For example, if the realtor spent 50% of the work time at home, 50% of the work time on the street door knocking to get seller clients. But he is a newbie so he didn't get any sellers from the street for that year, instead, he generated 100% of his income working in his home office by managing properties remotely. 

How to answer: what percentage of your work was done at this home office?

Please give a clear answer, the percentage to "time" worked, or the percentage to "income" generated?
 
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2 Replies
harsteve007
Returning Member

What is the correct way to answer: "what percentage of your work was done at this home office?"

(Deleted)

PatriciaV
Expert Alumni

What is the correct way to answer: "what percentage of your work was done at this home office?"

Enter the percentage of business work (time) in the home office. Because this deduction is connected to a space, the time spent in the space determines the allocation of the deduction. Most business owners would find it difficult to measure income generated in one place or another.

 

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