In Schedule C, line 30, how to enter the rent I paid as home office expenses? TurboxTax 2023 has bug and Error.

[yonghai]

It seems that TurboTax has a bug, I received a form 1099-NEC with 8K income in Box 1. In Business Income and Expenses (Sch C) Section, If I use the step-by-step method, TurboTax enters into a dead loop, It keeps asking me if I have any 1099-MISC income, I click 'No", then it asks me "Did I get a 1099-K"? I click "No", then it asks me 1099-MISC again, I can't get out of this dead loop to enter the rent I paid as expenses.

So, I go to the FORM Method, my income from 1099-NEC is $8000, my other expenses(excluding the rent) is $1000. In Schedule C, Line 30, I click QuickZoom to Form 8829, In Simplified Method Smart Worksheet, Line A, Gross Income Limitation, it shows negative -1000 automatically. This makes me unable to enter any rent I paid as expense for home office.  The negative -1000 in Line A is incorrect, it should be $8000-$1000=$7000.

I don't know why TurboTax has such bug and error?

Anybody sees the same problem in TurboTax Premier? 

[rjs]

The 1099-MISC/1099-K loop is a known bug in a recent update. The bug has been reported to TurboTax and they are working on it.

Here is a workaround that has worked for a number of other people. Give it a try. It should let you continue with the Schedule C interview.

https://ttlc.intuit.com/community/taxes/discussion/re-when-i-select-no-for-the-question-did-you-rece...

[yonghai]

In my case, my gross income is $8000, my other expense is $1000, so my Gross Income Limitation should be $7000, but TurboTax shows -$1000, so I can't claim any rent I paid as expenses.

In the interview, TurboTax says "Because the net profits for your business was zero or less, which means you can't get the home office deduction".

This is really weird that TurboTax has this error... 

[VolvoGirl]

Did you look at the actual Schedule C and see if it’s right?  Where is the 1,000 expenses showing up?  Is the gross income on line 1?  Maybe you started another Schedule C by mistake.  Delete one and add the info to one Schedule C.  

[yonghai]

I went to the Form Sch C:

The gross income on line 1 is $8,000.

The total expense from Line 8 to Line 27 is $1,000.

Line 28 Total Expenses is $1,000.

Line 29 Tentative Profit is $7,000.

All Above is correct. 

The problem is in Line 30. 

My Gross Income Limitation is -1,000. 

I have only one Sch C. 

Thank you, VolvoGirl.

[rjs]

Did you sell any business property at a loss? The loss reduces the gross income limitation. Is there a Form 4797 in your return that shows a loss, or a loss on Schedule D that is attributable to your business?

The amount on line A of the Simplified Method Smart Worksheet comes from Part II of the Form 8829 Worksheet. In forms mode the Form 8829 Worksheet may not appear in the list of "Forms in My Return," but you can open it. Click the Open Form icon. In the search box type 8829. One of the forms that will appear in the list is the Form 8829 Worksheet. Select it and open it. Look at Part II to see how the gross income limitation is calculated. Is there an amount on line 8 of Part II? If so, that is being subtracted from the gross income.

[frazerloomis]

I’m having the same problem and it’s a little late for them to be having bugs this major in the program….

[rjs]

@frazerloomis 

Please see my reply to your other post about entering expenses, and reply in that thread with the requested information. Please keep all the discussion of your problem in one place, under the separate question that you posted. When information is scattered in multiple threads it's confusing and hard to follow, and hard to see the whole picture.

Have you entered any expenses? This thread is about the calculation of the home office deduction after you have entered expenses. Do you really have the same problem? Your other post doesn't sound like it's the same.

[rjs]

@frazerloomis 

Please stop posting multiple questions about the same problem. When information is scattered in multiple threads it's confusing and hard to follow, and hard to see the whole picture. The reply from tagteam to one of your other posts should solve your problem.

[yonghai]

Hi RJS,

You are the expert. Thank you very much for your reply.

But this is a TurboTax bug or error.  here is the answer to your questions:

I didn't sell any business property at a loss, my Form 4797 is completely empty.

Part II of my Form 8829 is also empty.  Same for line 8 of Part II.

TurboTax takes my income of 8,000 from 1099-NEC as zero, and reduce my other expense from 0 to get -1,000.

I did carry the stock loss from 2022 in schedule D, but I don't think this should impact my business income from 1099-NEC. 

[rjs · Accepted solution]

@yonghai 

"Part II of my Form 8829 is also empty. Same for line 8 of Part II."

I'm not referring to Part II of Form 8829. I'm talking about Part II of the Form 8829 Worksheet. That's a different form. Please reread my previous reply about how to see the Form 8829 Worksheet.

In Part II of the Form 8829 Worksheet (not Form 8829):

• Is line 1 $8,000?
• Is line 2 100%?
• Is line 6 $1,000?
• What are the amounts on lines 7, 8, and 9?

"TurboTax takes my income of 8,000 from 1099-NEC as zero"

In an earlier post you said that Schedule C line 1 is $8,000. I assume that comes from the 1099-NEC. So why do you say that TurboTax takes the income from the 1099-NEC as zero?

[rjs]

@yonghai 

Did you ever go through the home office expenses section of the Step-by-Step interview? If not, that could be what is causing the problem with the gross income limitation. You may have skipped that part of the interview because you were having trouble getting to the Business Expenses part of the interview. Use the workaround that I posted above to get past the 1099-MISC/1099-K loop and get to business expenses. Then go through the home office expenses topic. That might solve your problem.

[yonghai]

Thank you RJS for your continue support. 

In the interview, TurboTax says "Because the net profits for your business was zero or less, which means you can't get the home office deduction". so, I can't move forward.

In Form 8829 worksheet, Part II, line 1, gross Income from Sch C, $8,000, that's correct. 

Line 2 is the problem, Percent of Gross Income from business use of home reported on Sch C, it's empty, so it's "0". 

This comes from Form 8829, Part II, Line 8, Line B, I just changed it to 100%, and it works now.

But the interview method still doesn't work, that's fine for now. I can get the Form method to work now.

Thank you, RJS. You help me a lot to go thru this.