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lawkj1OJ
Level 2

2020 Home Office Depreciation Incorrect - How to Fix This?

For my home office, Turbotax 2020 is calculating the allowable home depreciation as 2.5% of the home value, rather than 2.5% of the home value multiplied by the percent of the home used for my home office (17.77%), so the result is way too high. Why would this be happening and how can I fix it (quickly, since taxes are due in two days)? 

 

I have tried going to the 8829 worksheet, but the depreciation amount field is not editable. I thought maybe that the depreciation number would be adjusted down elsewhere, but the total amount is added to the home office deduction. This is so much higher than last year's that it will be an obvious red flag.

 

Update: I did notice that the asset type for the home is blank. I don't see an option for a residential (nonrental) home so I'm not sure what to choose. Regardless of what I choose, next time I come back to this it's back to being blank.

 

Please let me know what other info would be helpful for me to provide. Thank you.

15 Replies
tagteam
Level 15

2020 Home Office Depreciation Incorrect - How to Fix This?

This is a regression bug in the program which the developers are in the process of fixing. 

lawkj1OJ
Level 2

2020 Home Office Depreciation Incorrect - How to Fix This?

Thank you for that bug info, @tagteam. How though do I get my taxes done now - how do I get around this bug? (How did all those affected who filed in April get theirs done?)

tagteam
Level 15

2020 Home Office Depreciation Incorrect - How to Fix This?

The issue surfaced, was fixed in an update, and then a subsequent update broke it again. 

 

We are waiting for the developers to release the next update (which should fix the current issue).

lawkj1OJ
Level 2

2020 Home Office Depreciation Incorrect - How to Fix This?

But my taxes are due on Friday. Are you saying that there is no way to manually bypass that calculation and that I am just  completely screwed? I can't even get it to just not take a depreciation. 

 

When is that update coming out?

tagteam
Level 15

2020 Home Office Depreciation Incorrect - How to Fix This?

I understand and this is a major issue. 

 

Updates are typically released on Thursdays so keep trying to update your software between tonight and tomorrow night.

lawkj1OJ
Level 2

2020 Home Office Depreciation Incorrect - How to Fix This?

I appreciate your quick assistance, @tagteam - I know that you are just the bearer of this bad news. 

 

I will check when I get up in the morning and if it's not there I will switch to H&R Block while there is still time to get things done, and I will never return to TurboTax. That no overrides are available given the likelihood of bugs is  beyond unacceptable. 

Mike9241
Level 15

2020 Home Office Depreciation Incorrect - How to Fix This?

if you don't owe there is no penalty fr filing late. your other options - see if it's fixed in time or to use overrides which will invalidate the Turbotax accuracy guarantee and prevent e-filing. you can wait til the morning of the 15th, then if not fix use overrides and get to an open post office by 11:59:59 PM. dropping in a PO box might make it late since it might not be postmarked until 10/16.  if you go the PO route you should use a method where you can track it or get proof of delivery.  

lawkj1OJ
Level 2

2020 Home Office Depreciation Incorrect - How to Fix This?

Thank you for the suggestions, @Mike9241.  How would I override it? The field isn't editable - I've tried clicking in it, double-clicking and right-clicking. (I've tried through the Easy Step process and then also directly on the 8829 form and on the 8829 worksheet.)

Mike9241
Level 15

2020 Home Office Depreciation Incorrect - How to Fix This?

try this. use the same % of the home area used for business to the total area of the house from form 8829. on the asset entry worksheet enter this as the percent of business use. example

cost of house $275,000 area used for business 400 sq ft area of house 1000 sg ft = 40%

on asset entry worksheet line 6 enter 40% as business use. the depreciation should be $2750,000 *.4 /39 = $2821 

 

this would be the same as $275,000 with 40% of the area used in business with 100% business use and 39 year life (home office is treated as nonresidential real estate). this may not kick out any errors so you may be able to e-file

 

 

lawkj1OJ
Level 2

2020 Home Office Depreciation Incorrect - How to Fix This?

I appreciate you taking the time to come up with this idea, @Mike9241 . Unfortunately it doesn't work - that % of business use flows through to the allowable deduction, limiting it too much. (I didn't go on to check if it also affects other fields.)

 

 

Mike9241
Level 15

2020 Home Office Depreciation Incorrect - How to Fix This?

i use the desktop deluxe version and it worked for me.  said house total cost $390,000 must use class as nonresidential real estate. i said acquired prior to 1/1/20  40% business use 

Turbotax calculated depreciation as $4,000 which is correct if the HO area is 40%

$390,000/39 = $10,000 full years depreciation with 40% HO use depreciation is $4,000 (if you started the business in 2020 you don't get a full years depreciation) 

 

even tried using $490,000 as the cost with $100,000 as cost of land still got the $4,000 deduction

for Turbotax to prorate other expenses you must use the indirect expense column

HO area 400 total area 1000 real estate taxes $25,000 Turbotax computed the deduction as $10,000

insurance 100% 2687 HO deduction 1075 (40%)

 

it could be that Turbotax has different programming issues among all its versions.

 

 

tagteam
Level 15

2020 Home Office Depreciation Incorrect - How to Fix This?


@Mike9241 wrote:

it could be that Turbotax has different programming issues among all its versions.


I was actually able to get this to work in the Home & Business version and I did not notice any glaring issues.

 

However, I would still be concerned with transferring a 2020 return with this workaround into next year's return with TurboTax.

lawkj1OJ
Level 2

2020 Home Office Depreciation Incorrect - How to Fix This?

Update: It's Friday October 15, taxes are due today, and there was no update this week to TurboTax. Since today's the final deadline for 2020 taxes, I bet the issue never gets fixed now. 

DoninGA
Level 15

2020 Home Office Depreciation Incorrect - How to Fix This?


@lawkj1OJ wrote:

Update: It's Friday October 15, taxes are due today, and there was no update this week to TurboTax. Since today's the final deadline for 2020 taxes, I bet the issue never gets fixed now. 


See this TurboTax support FAQ for this issue - https://ttlc.intuit.com/community/assets/help/why-is-the-home-office-asset-type-missing-in-the-revie...

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