Home Office Deduction

[Leah]

I’m trying to claim a home office expense, and at first I took the standard deduction and it showed me that I had a deduction of roughly $1300. Then I thought I would try entering my actual expenses. When I began to do that I noticed that it showed my PO Box mailing address as my “home office”, which of course is silly, so I created a different one under a different name and deleted that one. Now, it is telling me that I’m not eligible for the home office deduction because I don’t have any net profit, but I do! Roughly $40,000. I can't understand the actual forms to see why it is not recognizing my net profit from the business. Any suggestions would be so welcome. I'm lost!

[JennyC]

Hi Leah,

For the home office deduction you may want try deleting that information (both) to make sure there is not a duplicate and then start over for that section. 

To edit your home office expense along with other common business expenses:

1. Open your return.
(To do this, sign in to TurboTax and select the blue Take me to my return button.)
2. Type “Schedule C” in the Search box and select the "Jump to" link in the search results.
3. If this is your first time entering info about your business, you’ll be asked some questions to start. If you have already entered some info about your business, click Edit next to your business.
4. Proceed through any additional screens.
You might want to enter your 1099-MISC, 1099-K, cash, and personal check income from your self-employment before you associate any expenses with your business, but this is not required.
5. You’ll then reach the deductions section. On the screen that asks what kind of expenses you had, scroll down and select Home office. You can select any other expense categories that apply to your business as well. Then click Continue at the bottom of the screen.
6. Now on the Here's your (type of work) info screen, scroll down to the Expenses section, and select Start next to Home Office.
7. Now enter the info about your home office.

If you’re not self-employed, but a W-2 employee instead, follow this link for the employee home office deduction: https://ttlc.intuit.com/questions/3603885-where-do-i-enter-the-employee-home-office-deduction

Here's some additional tips:

https://turbotax.intuit.com/tax-tips/small-business-taxes/the-home-office-deduction/L1RZyYxzv 

https://ttlc.intuit.com/questions/3802999-it-says-i-can-t-claim-a-home-office-deduction-because-prof...

[BMcCalpin]

The ability to take the home office deduction on Schedule C is not based on the net profit on Schedule C but can be considerably more arcane.

As the IRS says, "If the business deductions that are unrelated to the use of your home are greater than the gross income derived from the qualified business use of your home, then you cannot take a deduction for this qualified business use of your home." This means that even though the net profit as shown on Schedule C shows a positive number, form 8829 and its worksheet may show a negative number.

Since you are doing actual expenses, first look at line 8 in Part II of the 8829. Is it negative? That will be your first clue.

If you have the desktop software, the following will work...

Click on the number in the box on line 8. A magnifying glass should appear at the left edge of the box. Click on the magnifying glass, and TurboTax will open the "Form 8829 Worksheet". Look at line 9 in Part II on the worksheet - this should be where your line 8 on the 8829 came from. Then look at Part II and see if you can start to make sense of a negative income number for your home deduction.

If you have the Online software, then the form 8829 and the 8829 worksheet can be seen once you pay for the product. Go to the end (File) and take a look at the Print Center or the PDF before you actually file.