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Schedule C: Home office expenses

If applicable, Home office is one of the largest deductions available to you. There are two ways to qualify (though you only need one):

  • Your regular workspace is reserved only for your self-employed work (no one uses the space for eating or other work). You need to use the space regularly (meaning ongoing use) and exclusively (meaning you use the space only for self-employment work).
  • You keep a dedicated space on your property where you store product samples or inventory. If you store samples or inventory for your business in any space in your home (such as a basement, attic, or spare room), you can claim that space.

In your tax return, you can claim a home office deduction using the simplified or actual expenses method. We use the simplified method for calculating estimated payments and in insights and reports. Here’s why you should keep track of both in our product.

For actual expenses, we provide these categories when sorting your transactions so that at annual tax time, you can choose the deduction method that’s most advantageous.

Remember, only the percentage that represents the size of your home office is deductible using the actual expenses method.

Heads up: Keep track of the total amounts you spend for these categories, and then TurboTax or your tax pro will help you claim the correct percentage and deductions at annual tax time.

We automatically categorize these transactions for you as home office expenses:

  • Mortgage interest (home office)
  • Mortgage (home office)
  • Homeowner/rental insurance
  • Rent and lease (home office)
  • Repairs and maintenance (home office)
  • Property tax (home office)
  • Utilities (home office)
  • Other home office expenses
Our category Description IRS form
Home Office Rent & Lease Costs for rent or lease of your home when you have a home office. Rent or lease of office furniture or equipment should use the general RENT & LEASE category instead. Form 8829, line 18 “Rent”
Home Office Repairs & Maintenance Costs for repair and upkeep of your home and/or home office, as long as it doesn’t add value. (Replacements or upgrades are considered assets instead.) General home repair and upkeep are proportionally deductible; repair and upkeep specifically for your home office is usually 100% deduction. Form 8829, line 19 “Repairs and maintenance”
Home Office Home/rental Insurance Costs for homeowner’s or rental insurance when you have a home office. All other business insurance should use the general BUSINESS INSURANCE category instead. Form 8829, line 17 “Insurance”
Home Office Mortgage Interest The cost of interest charged on your mortgage when you own your home and have a home office. Important: Only the interest portion of your mortgage payment is deductible. The principle portion isn’t. Form 8829, line 10 “Deductible mortgage interest”
Home Office Property Tax The cost of your property taxes if you have a home office, own your home, and pay property taxes on it. Form 8829, line 11 “Real estate taxes”
Home Office Utilities Costs for utilities (phone, electricity, water) for your home when you have a home office. All other business utilities should use the general UTILITIES category instead. Form 8829, line 20 “Utilities”
Home Office Other Expenses Costs for expenses for your home office that don’t fit into other home office categories. Examples might be neighborhood association dues or home security fees. Form 8829, line 21 “Other expenses”

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