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apslabey
Level 1

If i'm using the square footage deduction for my home office, should i split my utilities? if so, what percentages?

 
1 Comment 1
Joesem M
Moderator

If i'm using the square footage deduction for my home office, should i split my utilities? if so, what percentages?

Hello there, @apslabey.

 

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.

 

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, the Actual Expense 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.

 

Also, I'd highly suggest consulting your accountant. He/She can provide more expert advice in dealing with this concern.

 

Also, I'm adding these resources, to learn more about handling home office deduction:

 

Feel free to post a comment below, in case you have other questions in mind. I'll get back to you. 

 

 

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