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james2
Level 1

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

 
Solved
Best answer November 21, 2019

Best Answers
Jen_D
Moderator

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

It's great to see you here, @james2,

 

QuickBooks Self-Employed uses 2 ways to calculate a home office deduction: the Simplified Method and Actual Expenses (Regular) method. We leave these options open so you can determine the most advantageous deduction each year for your annual taxes.

 

If you set your account for a home office deduction in the Annual Taxes window, a deduction amount ($500 to $1500) then appears in the Deduction column.

 

The system estimates your quarterly tax payments using the simplified method. This means that you have a standard deduction of $5 per square foot, up to 300 square feet (the deduction can’t exceed $1,500).

 

We use this method for calculating business profit and deductions, Tax Summary and Tax Details reports. Actual expenses are excluded from all calculations to make sure there are no double counting for this deduction.

 

On the other hand, Regular method is best for annual taxes, to categorize higher expenses for a larger home office. That way, you'll have the totals needed for TurboTax or your tax pro so they can help you choose the biggest deduction.

 

Be sure to review the home office categories we offer so you don't overlook expenses that could increase your deduction in your annual tax return. To learn more about handling Home Office Deductions, see this references:

 

No place like home: Understanding your home office deduction.

The (Almost) Ultimate Guide to Self-Employed Expenses and Tax Deductions.

Overview of the home office deduction.

 

If you have other questions or clarifications about this topic or anything in QBSE, please drop a comment below. I'll be glad to share additional insights and help whenever you need it. Enjoy the rest of the week and take care!

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15 Comments 15
Jen_D
Moderator

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

It's great to see you here, @james2,

 

QuickBooks Self-Employed uses 2 ways to calculate a home office deduction: the Simplified Method and Actual Expenses (Regular) method. We leave these options open so you can determine the most advantageous deduction each year for your annual taxes.

 

If you set your account for a home office deduction in the Annual Taxes window, a deduction amount ($500 to $1500) then appears in the Deduction column.

 

The system estimates your quarterly tax payments using the simplified method. This means that you have a standard deduction of $5 per square foot, up to 300 square feet (the deduction can’t exceed $1,500).

 

We use this method for calculating business profit and deductions, Tax Summary and Tax Details reports. Actual expenses are excluded from all calculations to make sure there are no double counting for this deduction.

 

On the other hand, Regular method is best for annual taxes, to categorize higher expenses for a larger home office. That way, you'll have the totals needed for TurboTax or your tax pro so they can help you choose the biggest deduction.

 

Be sure to review the home office categories we offer so you don't overlook expenses that could increase your deduction in your annual tax return. To learn more about handling Home Office Deductions, see this references:

 

No place like home: Understanding your home office deduction.

The (Almost) Ultimate Guide to Self-Employed Expenses and Tax Deductions.

Overview of the home office deduction.

 

If you have other questions or clarifications about this topic or anything in QBSE, please drop a comment below. I'll be glad to share additional insights and help whenever you need it. Enjoy the rest of the week and take care!

View solution in original post

james2
Level 1

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

Thank you Jen.  This will help when my client has a question about the amount if they ever compare it to their actual tax return.

Jen_D
Moderator

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

You're welcome, @james2.

 

It's my pleasure to help. If you have other questions in mind, please drop another comment below or mention me on your posts.

 

The Community doors is always open and I'm here to lend a hand at any time. Wishing you continued success on all future endeavors. All the best!

vbpets
Level 2

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

The "regular method" will not update. QBSE keeps defaulting to the simplified method even if you totally remove Home Office option and then try to update it to regular method.

vbpets
Level 2

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

QBSE will not accept regular method and keeps defaulting to simplified method. The entire reason I am paying $17.00 per month for this functionality. 

Tori B
QuickBooks Team

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

Good morning, @vbpets

 

Thanks for reaching out to us here in the Community. 

 

I recommend contacting our support team as they have the tools available that can pull your account in a secure environment to investigate this issue and its odd behavior. I've posted the steps to contact support below. 

 

On a web browser:

 

  1. Select Assistant from the top bar. 
  2. Type "Talk to a human".
  3. Then choose your preferred support method: Message an agent, Call an agent or Get a callback

If you have further questions or concerns, don't hesitate to let me know. You can reach back out to us here in the Community any time you find you need a helping hand. Take care and have a good one! 

 

 

fiona10
Level 2

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

was this solved? mine defaults to simplified as well and i want to do regular home office deductions.

Angelyn_T
QuickBooks Team

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

Hi, @fiona10.

 

I appreciate you for following up with us here on the Community page.

 

As mentioned by Jen_D above, the system estimates your quarterly tax payments using the simplified method. But with larger expenses, the regular method is best for annual taxes. Claiming your home office deduction using the regular method doesn’t stop at the home itself. You can use your business use calculation to determine how much of the following can be deducted for business use as well:

 

  • Mortgage (or rent) payment
  • Utility costs
  • Homeowners (or renters) insurance premiums

 

Thus, I recommend reviewing your home office categories to check for your expenses. 

 

Deciding between these methods when claiming the home office deduction is tricky. You need to think about the size of your home office and the calculations you want to make. For some small business owners, the difference in the deduction isn’t worth the extra paperwork and record-keeping that comes with the regular method.

 

If your home office is small, you’ll likely benefit from the simplified method. The calculations are less complex, and you’re likely to see a slightly larger deduction by claiming $5 per square foot.

 

I'm adding these links for more resources about home office deduction:

 

 

Moreover, here's an article you can open to know more about the updates to expenses categories in QuickBooks Self-Employed.

 

If you have any other questions about home office deductions, please let me know by adding a comment below. I'm always here to help. Have a good one!

fiona10
Level 2

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

Thanks for the quick reply. I understand the difference and want to use the regular method. How do I set that preference? The program is defaulting to standard and won’t let me change it to regular. How do I do this? 

fiona10
Level 2

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

I understand the difference and want to use the regular method – not the simplified method. The program is defaulting to simplified method and won’t let me change it. How do I set it to calculate the regular method?

GlinetteC
Moderator

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

Hello, Fiona. I can help share additional information regarding the deduction method in QuickBooks-Self Employed.

 

QBSE uses the simplified deduction method in calculating your federal estimated quarterly tax payments.

 

You may consider seeking expert advice from a tax pro. They can advise which method suits your business. To learn more about each deduction method, you can visit the IRS website.

 

I am also adding this article that contains more details about tracking home office deductions in QuickBooks Self-Employed.

 

As always, you can post anytime here for any additional concerns.

fiona10
Level 2

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

Yes. As I said, I understand the difference in how to calculate and want the regular deductions. The program itself does not allow me to choose regular and instead defaults and gets stuck on simplified. I am not asking about it the difference in regular vs simplified. I am asking how to get QBSE to go with regular deductions for home office. 

DandMTz
Level 1

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

Unfortunately, this issue if NOT 'solved' or resolved. The bug is still present and is not allowing us to use the regular method for calculating actual (not estimated) home office deductions for annual taxes. To reiterate:

 

- We already know which option to choose between regular and simplified.

- We have decided on regular but QBSE is not cooperating

- We have asked the problem be fixed and continue to get unhelpful answers to a question we didn't ask.

 

Read carefully. The issue is that QBSE is not calculating the regular method for home office deductions. The whole point of using software like this is to simplify the process of filing taxes. However, this glitch prevents just that. Therefore, you should fix it or return a portion of our subscription costs.

 

David

ef85
Level 1

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

Was anyone able to resolve this issue?

Mine is also defaulting to the simplified method, when the regular method is substantially more beneficial to my deductions.

Jen_D
Moderator

It appears that in QB Self-Employed, that the home use calculation automatically defaults to the $1,500 deduction without taking into account actual profit/loss

Thanks for joining this discussion and sharing your experience with the home office deduction calculation, @ef85,

 

To help you further with this, the system determines the method to be applied based on how you categorize your transactions. I have found a related link with my colleague's explanation on how to make sure your entries are calculated using the Regular Method.

 

Open this link for the detailed answer: https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/how-do-i-get-quicken-se-to-...

 

Post here again if there's anything else I can help you. I'll be right here to assist your with this QBSE concern anytime. Have a good one!

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