BUG. TurboTax Deluxe Form 8829. It entered the incorrect amount into line A of the Simplified Method Worksheet: total expenses not total income, & registered a loss

[JG2222]

Thus, it denied my expense. Please fix this BUG.

[KeshaH]

If you'd like, we can look at your return and see exactly what you see to  help come to a resolution. The return will be scrubbed and won't include any of your personal details.

If you're using TurboTax Online:

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

Please reply to this message with your token so that we can further assist you. Let us know what state is included in your return.

[JG2222]

I am using turbotax deluxe that is downloaded onto my PC. Are there other options for this software? Previous years worked fine.

[AnnetteB6]

There was an examination of multiple customer token files to determine whether further investigation by the development team was required for a situation like the one you described.  The conclusion is that TurboTax is calculating the Simplified Home Office deduction correctly in each situation that was examined.  

Here are the details about how the Simplified Home Office deduction works, and what could be causing the situation in your return.

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.  

@JG2222 

[JG2222]

Thank you for replying to my query. The information I provided fit the conditions for a home office deduction, as it has in previous years.

From the standard interview format, it seems that the total expenses for the business were listed on the Form 8829 Smart Worksheet Line A not Income minus Expenses.

I ended up deleting that form, and used the form view to enter the information in Form 8829 and Simplified Method Smart Worksheet, which worked.

[jtmoods]

Thanks so much JG2222.  I had the same problem (Line A of the Simplified Worksheet for Form 8829 grabbing only expenses and ignoring income, even though I answered that I do ALL of this business from my home office).  In my case I had to delete both my Schedule C and my Form 8829 and put them both in using the Forms view to input the information.  Then it worked.  Your answer was the only helpful one I found -- thanks so much!!

TurboTax clearly has a bug here, as you can see from the large number of people asking the same question. They keep answering that it is related to specifying that you use the home office for more than 0% of the operation of the business.  The problem is that in at least some variations of the Easy Step process, it just doesn't ask the question in % terms, but only "do you conduct ALL of your business from this office" with a checkbox.  Even when you check that, it seems to ignore the income from your business and use only your expenses in the Simplified Worksheet line A.  I'm using the downloaded version of TT  Premier 2024 on a Mac and have the latest update (as of Feb 26, 2025).  The cynical me is wondering if they intentionally get this wrong in every version of TT other than Home and Business.

[JG2222]

Glad the solution worked, what a pai though.