TurboTax version and couple of other questions

[mrmcmurry]

Last year I chose TurboTax Deluxe and toyed with idea of claiming home office but seemed to keep getting "suggestions" to upgrade to TurboTax Home & Business to better deal with the home office issue/questions.  Had been told in past that claiming home office just raised red flag for IRS...so in the end just got antsy and did not claim it.  This year purchased TT Home & Business just so I could see how it handled it...but wondering what your advice would be about claiming home office deduction?

Also have couple of other questions about reporting a K1...

[ColeenD3]

Yes, It is a legitimate business expense but can be a red flag due to the potential for disabuse. Keep good records, and you'll have nothing to worry about. You shouldn't let fear of the IRS prevent you from claiming something you are entitled to.

If you're self-employed, however, housing-related expenses such as mortgage interest, rent, utilities, repairs, and depreciation for the portion of your home or rental that you use to run your business are allowable expenses under the home office deduction.

You may be able to claim the home office deduction if your office is:

• Used regularly and exclusively for your business, and
• Is your principal place of business (both conditions must apply).

When you enter your home office information in TurboTax, we'll ask some questions to determine if you can claim the deduction and how much the deduction is worth. You’ll need information like the square footage of your residence and the rooms you worked in.

[mrmcmurry]

ColeenD3...thanks!  

Okay so let me ask your advice about which TT version.  I am a 25% owner/active employee in a company and get a K1 each year to then input into my personal return.  When I started using the TT Home & Business version this year and got to point of putting in K1 it just seemed like it went way more in depth than in past and I began to question if necessary.  Seemed like TT assumed I was running my own sole proprietor business and/or had employees I pay.  I always thought of myself as "self employed" but it made me wonder if I "qualify" as self employed.  I started feeling like I just would be better off if I could just plug in the numbers directly from my K1 (as I had done last year) rather than getting in so deep into the discussion of me owning a business and all the possible business expenses...thoughts?

And also...if I wanted could I just start another return using TT Home & Business and maybe just answer questions differently so that I could just "plug in numbers" from K1 so that it would be closer to what I did last year using TT Deluxe?

[MarilynG1]

In your case of being a 25% owner of a business, you would be considered 'self-employed' and report K-1 income/deductions on Schedule C in the Business section of TurboTax.

In the past, you may have been reporting your K-1 as 'Personal' income. 

Click this link for more info on Reporting K-1 Income.