Why am I not allowed to take home office deduction...
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Level 3

Why am I not allowed to take home office deduction for 2019? I meet all eligibility criteria and my net profit is >0.

I have "carryover of unallowed expenses" (line 42, Form 8829) from 2017 because I was not profitable in 2017 (net profit -$18211). I did not claim home office deduction in 2018, and my net profit was again negative (-$18354). For 2019, I am back to using home office again and finally my business is net positive +$9900.  I am claiming 30% space usage of my home office that is 1000 sq ft, total of 300 sq ft space for home office.   I meet all eligibility criteria for self employed individual to claim home office deduction.  How can I ensure I am finally able to use my carryover of unallowed losses from 2017 for home office as well as qualify for the home office deduction for this year?
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Expert Alumni

Why am I not allowed to take home office deduction for 2019? I meet all eligibility criteria and my net profit is >0.

Type 'nol' in the Search area, then click on 'Jump to nol' to enter your Carryover Business Loss. 

 

For your Home Office deduction for 2019, be sure that you indicated that '100% of your Business Income' is earned from your Home Office.

 

Click this link for more info on Why Don't I Qualify for Home Office?

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Level 3

Why am I not allowed to take home office deduction for 2019? I meet all eligibility criteria and my net profit is >0.

@MarilynG1 

Thank you. I deleted the home office worksheet and did it again and it accepted it. I did itemized deduction this time which happened to offer me more deduction.  Turbotax software also seemed like it applied the carryover unallowed loss from 2017.  Where in the tax form can I see these valued entered to make sure it is being correctly processed?

 

Also, what is the effect on entering my carryover business loss? How is my AGI or tax liability affected by this? I imagine this is my net profit (which was negative) from 2018.

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Expert Alumni

Why am I not allowed to take home office deduction for 2019? I meet all eligibility criteria and my net profit is >0.

If your Business has a negative income, that amount lowers your AGI for that year.

 

 If you weren't allowed to claim your all of your Business Loss last year, the NOL carryover shows on the Federal Carryover Worksheet. 

 

Look at Schedule 1, Line 3 for Business Income/Loss (Line 12 for 2018). This carries over to Form 1040, Line 7a. 

 

You weren't allowed the Home Office Deduction (because you had a negative business income) so that is also being carried over.  

 

Look at Form 8829, Business Use of the Home, Line 25 for last year's unallowed deduction for Home Office.

 

 

 

 

 

 

 

 

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