Home Office Deduction Tax Forms

Once you have finished computing your home office deduction, you need to be sure to claim it on the correct forms.

The way in which you claim your home office deduction depends on your employment status and on the method, either regular or simplified, that you used:

If you are self-employed. Self-employed people who use the regular method must fill out a special form to claim the home office deduction. You must complete Form 8829, Expenses for Business Use of Your Home, and then transfer the total to your Schedule C when you file your income tax return. Unfortunately, Schedule C-EZ, which is a much simpler form, can't be used if you're claiming the home office deduction. The business portion of your home mortgage interest and real estate taxes is claimed on Form 8829 and cannot be claimed again as an itemized deduction on Schedule A of your return.

Self-employed people who choose the simplified method do not complete Form 8829. Simplified method filers enter the square footage of the home and the square footage of the part of the home used for business on Line 30 of Schedule C. Then they use the Simplified Method Worksheet in the instructions to figure the deduction amount to enter on Line 30.

If you are an employee. Employees, including owner/employees of C corporations, are not required to complete Form 8829. For the regular method, your unreimbursed home office deductions are usually claimed on Form 2106, Employee Business Expenses, along with any other unreimbursed employee business expenses. For the simplified method, use the Simplified Method Worksheet in IRS Publication 587, Business Use of Your Home to compute your allowable home office deduction.

Then, the total of such expenses is included in your miscellaneous deductions on Schedule A of your individual income tax return. As such, they are subject to the 2 percent floor; in other words, you can deduct only the portion of all miscellaneous expenses that is more than 2 percent of your adjusted gross income.

In some cases, you might be able to avoid filing Form 2106. If your only reason for filing the form would be to claim the home office deduction, and your employer did not reimburse you for any home office expenses, you don't have to file the 2106. Instead, you can claim the deduction directly on the bottom of your Schedule A.

Planning Tools You can download Form 8829, Schedule C, Form 2106 and Schedule A to aid in your financial planning.

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