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Frank J1
Level 1

Rent payment is not being automatically being split for home office deduction, even after setting it up.

In Quickbooks Self-Employed, I have gone to "Home Office Info" and under the regular method have input the square footage for my office and apartment for the current year. 

 

I have then categorized rent expenses this year as "Rent and Lease (Home Office)". QB tells me not to split these expenses manually, and says it will do it automatically based on the percentage I put in the regular method settings.

 

However, in my Tax Summary Report, under the home office deduction, 100% of the rent expenses are being counted. QB is not splitting the expenses based on the percentage I set up in the home office settings.

 

Please tell me what I am missing here?

3 Comments 3
LollyNino_C
QuickBooks Team

Rent payment is not being automatically being split for home office deduction, even after setting it up.

It's nice to see you here in the Community, @Frank J1.

 

I have some information about the home office deduction. After you've categorized the deduction as home office expenses, this shows what your estimated deduction is and the whole amount in your account.

 

Since Home Office deduction is an annual type when filing taxes you have to manually list all Home Office-related transactions. Just make sure you have set up the Home Office size in QBSE correctly. Then, record the total amount you paid and categorize it as Rent (Home Office). 

 

You can read through these articles about how to track and categorize per transactions: 

 

You can also see this great resource which you may find helpful as a reference: Schedule C and expense categories in QuickBooks Self-Employed

 

Please let me know if you need anything else. I'll be around to help you some more. Take care. 

Frank J1
Level 1

Rent payment is not being automatically being split for home office deduction, even after setting it up.

Thank you for your reply. However, I do not think you addressed the issue I'm having.

 

I have set up my home office regular deduction in "Home Office Info".

13% of my rent should be split as home office deduction.

I have labeled transactions as Rent (home office).

The total of these transactions is $10,710.

I thought Quickbooks would automatically calculate 13% of that total ($1392)

However, the tax report shows 100% of the total instead of 13%

 

Please see the attached screenshot that shows what I am talking about.

AileneA
QuickBooks Team

Rent payment is not being automatically being split for home office deduction, even after setting it up.

Hello, Frank J1.  

 

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).

 

So let's double-check the setup size of your Home Office in QuickBooks. Afterward, the system will automatically calculate your Home Office-related deductions.   

 

Let me guide you how:

  1. Go to the Taxes menu.
  2. Within the Annual tab, select the Home office expenses section.
  3. Tap Add a home office or Current home office if you already entered the square footage.
  4. Select a tax year.
  5. Choose the Simplified method or Regular method tab.
  6. Enter your estimated home office square footage.
  7. Then, hit the Save button. 

 

Once it's set up, you don't have to manually split the rent. I suggest reaching out to your tax adviser to verify the method that best suits your situation. They can also help you with the categorization of expenses.

 

I'll add some helpful articles that you can check: 

 

 

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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