I am a realtor using the home office deduction, is the percentage of business conducted in home office critical to be at a certain value.

[Quebmana]

I am a realtor using the home office deduction, is the percentage of business conducted in home office critical to be at a certain value.

[Vanessa A]

There is not a "Certain Value" that it needs to be at, but it does need to be at the actual value. 

The reason TurboTax is asking is because the home office expense deduction is based on the percent of income that comes from the home office.  So if you earn $20,000 and 75% of the time you are on the road and 25% of the time you are in your office, then you would only be able to deduct 25% of your home office expense of $5,000.  

The number can be anywhere between 1% and 100%, it just needs to be the actual percentage.

[Quebmana]

I understand your answer. I'm a realtor and I'm estimating not critically monitoring this time though. If i write down 70% and it turns out it is 67 - 69% is that okay.?

I think as long as i'm honestly trying to place thoughtful division of training, developing new clients, managing my CRM, I'm on target. the answer for me is the difference of how much I am showing homes compared to preparing for the showing. Usually home sales go quick if they are done right.

[Quebmana]

how are you expected to document the calculated percentage of business conducted in home office...?

[TeresaM]

You will probably have a calendar that shows when you have time away from the home office, so if the IRS does ever come back and question the number, just have supporting documentation to show where you arrived at the percentage. 

[Quebmana]

• What are the business expenses that would not limit your home office deduction.?
• What are the business expenses that would limit your home office deduction.?

1. Turbo Tax help says this: Here's how home office deduction works. Let's say
   - Your business income before any expenses was $10,000
   - All business expenses that would not limit your home office deduction were $4,000, and
   - The home office expenses were $3,000