Announcement

Collapse
No announcement yet.

Office in home vs sch A

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Office in home vs sch A

    I have a client who runs a daycare out of her home and uses the basement level exclusively. The office in home deduction isn't allowed in full on her schedule C as her income is wiped out prior to all deductions.

    Can I put their mortgage interest and property tax 100% on schedule A?

    #2
    Originally posted by taxgirl View Post
    I have a client who runs a daycare out of her home and uses the basement level exclusively. The office in home deduction isn't allowed in full on her schedule C as her income is wiped out prior to all deductions.

    Can I put their mortgage interest and property tax 100% on schedule A?
    TTB 5-15. Day care simplified method.

    Comment


      #3
      Can you bounce between simplified and actual square footage year by year?

      Comment


        #4
        Originally posted by taxgirl View Post
        Can you bounce between simplified and actual square footage year by year?
        Yes you can, but if you are running a Daycare the daycare method works best most of the time.
        Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

        Comment


          #5
          Yes to Bouncing

          You may switch methods every year. However, if there would be non depreciation, home office carry over you would not want to use the Simplified Method as those amounts would be lost. You can't do the regular method and allocate interest and taxes to A in excess of the proper percentages.

          Comment


            #6
            I agree, you can change back and forth, but the Simplified Method is really not a good idea for a daycare. In almost all cases, I would recommend the Actual Expenses on Form 8829 and let the unallowed expenses carry over to next year.

            Comment


              #7
              I completely agree!
              Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

              Comment


                #8
                Originally posted by Kram BergGold View Post
                carry over . . . amounts would be lost.
                TTB 5-15; Pub 587 p. 12:
                Can be carried over until next regular method usage.

                Comment


                  #9
                  Thanks All!

                  Comment

                  Working...
                  X