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How To Amend 2011 Tax Return Turbotax

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How To Amend 2011 Tax Return Turbotax

How to amend 2011 tax return turbotax Index A Abandonment of home, Abandonment. How to amend 2011 tax return turbotax Absence, temporary, Temporary absence. How to amend 2011 tax return turbotax Abstract fees, Settlement fees or closing costs. How to amend 2011 tax return turbotax Address, change of, Reminders Adjusted basis, Adjusted Basis, Adjusted Basis Definition of, Determining Basis Worksheet 1 to figure, Determining Basis, Worksheet 1. How to amend 2011 tax return turbotax Adjusted Basis of Home Sold—Illustrated Example 1 for Peter and Betty Clark, Worksheet 1. How to amend 2011 tax return turbotax Adjusted Basis of Home Sold—Illustrated Example 3 for Emily White, Worksheet 1 Instructions. How to amend 2011 tax return turbotax Adjusted Basis of Home Sold Adoption Adjusted basis of home for credit claimed, Decreases to Basis Advertising fees, Selling expenses. How to amend 2011 tax return turbotax Amount realized, Amount Realized Appraisal fees, Settlement fees or closing costs. How to amend 2011 tax return turbotax Architect's fees, Construction. How to amend 2011 tax return turbotax Armed forces Ownership and use tests, Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. How to amend 2011 tax return turbotax Assistance (see Tax help) B Back interest, Settlement fees or closing costs. How to amend 2011 tax return turbotax Basis Adjusted basis (see Adjusted basis) Determination of, Determining Basis, Adjusted Basis Other than cost, Basis Other Than Cost Building permit fees, Construction. How to amend 2011 tax return turbotax Business use of home, Business Use or Rental of Home, Use test met for business part (with no business use in year of sale). How to amend 2011 tax return turbotax C Casualties Amounts spent after to restore damaged property, Increases to Basis Deductible casualty losses, Decreases to Basis Disaster as cause of, Specific event safe harbors. How to amend 2011 tax return turbotax Insurance payments for casualty losses, Decreases to Basis Change of address, Reminders Closing costs, Settlement fees or closing costs. How to amend 2011 tax return turbotax Commissions, Selling expenses. How to amend 2011 tax return turbotax , Settlement fees or closing costs. How to amend 2011 tax return turbotax Community property Basis determination, Community property. How to amend 2011 tax return turbotax Condemnation Gain exclusion, Home destroyed or condemned. How to amend 2011 tax return turbotax Ownership and use test when previous home condemned, Previous home destroyed or condemned. How to amend 2011 tax return turbotax Condominiums As main home, Main Home Basis determination, Condominium. How to amend 2011 tax return turbotax Construction costs, Construction. How to amend 2011 tax return turbotax Built by you, Built by you. How to amend 2011 tax return turbotax Cooperative apartments As main home, Main Home Basis determination, Cooperative apartment. How to amend 2011 tax return turbotax Ownership and use tests, Cooperative apartment. How to amend 2011 tax return turbotax Cost as basis, Cost As Basis Credit reports Cost of obtaining, Settlement fees or closing costs. How to amend 2011 tax return turbotax D Date of sale, Date of sale. How to amend 2011 tax return turbotax Death Sale due to, Specific event safe harbors. How to amend 2011 tax return turbotax Spouse's death before sale, ownership and use tests, Sale of main home by surviving spouse. How to amend 2011 tax return turbotax Decreases to basis, Decreases to Basis Depreciation After May 6, 1997, Depreciation after May 6, 1997. How to amend 2011 tax return turbotax Home used for business or rental purposes, Decreases to Basis Destroyed homes Gain exclusion, Home destroyed or condemned. How to amend 2011 tax return turbotax Ownership and use test when previous home destroyed, Previous home destroyed or condemned. How to amend 2011 tax return turbotax Disabilities, individuals with Ownership and use test, Exception for individuals with a disability. How to amend 2011 tax return turbotax Disasters, Specific event safe harbors. How to amend 2011 tax return turbotax Discharge of qualified principal residence indebtedness, Adjusted Basis Divorce Home received from spouse, Home received from spouse. How to amend 2011 tax return turbotax Home transferred to spouse, Transfer to spouse. How to amend 2011 tax return turbotax Ownership and use tests, Home transferred from spouse. How to amend 2011 tax return turbotax Sale due to, Specific event safe harbors. How to amend 2011 tax return turbotax Transfers after July 18, 1984, Transfers after July 18, 1984. How to amend 2011 tax return turbotax Transfers before July 19, 1984, Transfers before July 19, 1984. How to amend 2011 tax return turbotax Use of home after divorce, Use of home after divorce. How to amend 2011 tax return turbotax Doctor's recommendation for sale, Doctor's recommendation safe harbor. How to amend 2011 tax return turbotax E Easements, Decreases to Basis Employee of the intelligence community, Employee of the intelligence community. How to amend 2011 tax return turbotax Employment Change in place of employment, Change in Place of Employment Payment by employer, when job transfer involved, Payment by employer. How to amend 2011 tax return turbotax Energy Conservation subsidies, Decreases to Basis Credit, Decreases to Basis Exclusion of gain, Excluding the Gain, Nonqualified Use Reduced maximum exclusion, Reduced Maximum Exclusion Expatriates, Expatriates. How to amend 2011 tax return turbotax F Federal mortgage subsidies Recapture of, Recapturing (Paying Back) a Federal Mortgage Subsidy Figuring gain or loss, Figuring Gain or Loss, More information. How to amend 2011 tax return turbotax Fire insurance premiums, Settlement fees or closing costs. How to amend 2011 tax return turbotax Foreclosure, Foreclosure or repossession. How to amend 2011 tax return turbotax Foreign Service, Foreign Service member. How to amend 2011 tax return turbotax Ownership and use tests, Members of the uniformed services or Foreign Service, employees of the intelligence community, or employees or volunteers of the Peace Corps. How to amend 2011 tax return turbotax Form 1040 Reporting sale of home, Reporting the Sale Seller-financed mortgages, Seller-financed mortgage. How to amend 2011 tax return turbotax Form 1040, Schedule A Real estate taxes, Real estate taxes. How to amend 2011 tax return turbotax Form 1040, Schedule D Reporting sale of home, Reporting the Sale Form 1099-S Proceeds from real estate transactions, Date of sale. How to amend 2011 tax return turbotax , Form 1099-S. How to amend 2011 tax return turbotax , Form 1099-S. How to amend 2011 tax return turbotax Form 2119 Sale of home, Adjusted Basis Form 6252 Installment sale income, Installment sale. How to amend 2011 tax return turbotax Form 8828 Recapture tax, How to figure and report the recapture. How to amend 2011 tax return turbotax Form 8960 Net Investment Income Tax, Net Investment Income Tax (NIIT). How to amend 2011 tax return turbotax NIIT, Net Investment Income Tax (NIIT). How to amend 2011 tax return turbotax Form 982 Discharge of indebtedness, Adjusted Basis Free tax services, Free help with your tax return. How to amend 2011 tax return turbotax Future developments, Future Developments G Gain or loss Basis determination, Determining Basis, Adjusted Basis Exclusion of gain, Excluding the Gain Exclusion of gain, nonqualified use, Nonqualified Use Gain on sale, Gain on sale. How to amend 2011 tax return turbotax Loss on sale, Loss on sale. How to amend 2011 tax return turbotax Postponed from sale of previous home before May 7, 1997, Decreases to Basis Worksheet 2 to figure, Worksheet 2. How to amend 2011 tax return turbotax Taxable Gain on Sale of Home—Completed Example 1 for Amy, Worksheet 1. How to amend 2011 tax return turbotax Adjusted Basis of Home Sold—Illustrated Example 1 for Peter and Betty Clark, Worksheet 2. How to amend 2011 tax return turbotax Taxable Gain on Sale of Home—Illustrated Example 2 for Peter and Betty Clark, Worksheet 2. How to amend 2011 tax return turbotax Taxable Gain on Sale of Home—Illustrated Example 3 for Emily White, Worksheet 2. How to amend 2011 tax return turbotax Taxable Gain on Sale of Home Gifts Home received as, Home received as gift. How to amend 2011 tax return turbotax H Health Sale of home due to, Health Help (see Tax help) Homebuyer credit Recapture, Recapture of the post-2008 first-time homebuyer credit. How to amend 2011 tax return turbotax Houseboats As main home, Main Home I Important reminders Change of address, Reminders Home sold with undeducted points, Reminders Improvements Adjusted basis determination, Improvements. How to amend 2011 tax return turbotax Charges for, Settlement fees or closing costs. How to amend 2011 tax return turbotax Receipts and other records, Adjusted Basis Useful life of more than 1 year, Increases to Basis Increases to basis, Increases to Basis Individual taxpayer identification numbers (ITINs), Individual taxpayer identification number (ITIN). How to amend 2011 tax return turbotax Inheritance Home received as, Home acquired from a decedent who died before or after 2010. How to amend 2011 tax return turbotax Installment sales, Installment sale. How to amend 2011 tax return turbotax Involuntary conversion, Specific event safe harbors. How to amend 2011 tax return turbotax ITINs (Individual taxpayer identification numbers), Individual taxpayer identification number (ITIN). How to amend 2011 tax return turbotax J Joint owners not married, Joint owners not married. How to amend 2011 tax return turbotax Joint returns, Jointly owned home. How to amend 2011 tax return turbotax Ownership and use tests, Married Persons L Land Sale of land on which home located, Land. How to amend 2011 tax return turbotax Sale of vacant land, Vacant land. How to amend 2011 tax return turbotax Legal fees, Selling expenses. How to amend 2011 tax return turbotax , Settlement fees or closing costs. How to amend 2011 tax return turbotax , Construction. How to amend 2011 tax return turbotax Legal separation Sale due to, Specific event safe harbors. How to amend 2011 tax return turbotax Like-kind exchange, Sale of home acquired in a like-kind exchange. How to amend 2011 tax return turbotax Living expenses, Reasonable basic living expenses. How to amend 2011 tax return turbotax Loan assumption fees, Settlement fees or closing costs. How to amend 2011 tax return turbotax Loan placement fees, Selling expenses. How to amend 2011 tax return turbotax Loss (see Gain or loss) M Main home Defined, Main Home Factors used to determine, Factors used to determine main home. How to amend 2011 tax return turbotax Property used partly as, Property used partly as your main home. How to amend 2011 tax return turbotax , Property Used Partly for Business or Rental Married taxpayers (see Joint returns) Maximum exclusion, Maximum Exclusion Reduced, Reduced Maximum Exclusion Military (see Armed forces) Missing children, photographs of, Reminders Mobile homes As main home, Main Home More than one home, More than one home. How to amend 2011 tax return turbotax Mortgage fees, Settlement fees or closing costs. How to amend 2011 tax return turbotax Mortgage insurance premiums, Settlement fees or closing costs. How to amend 2011 tax return turbotax Mortgage subsidies Recapturing (paying back) federal mortgage subsidy, Recapturing (Paying Back) a Federal Mortgage Subsidy Mortgages, seller-financed, Seller-financed mortgage. How to amend 2011 tax return turbotax Moving expense, Settlement fees or closing costs. How to amend 2011 tax return turbotax Multiple births Sale due to, Specific event safe harbors. How to amend 2011 tax return turbotax N Nonqualified use, Nonqualified Use Nonresident aliens Spouse as, transfer of home to, Exception. How to amend 2011 tax return turbotax O Option to buy home, Option to buy. How to amend 2011 tax return turbotax Ownership and use tests, Ownership and Use Tests, Ownership and use tests met at different times. How to amend 2011 tax return turbotax P Partly used for business, Property Used Partly for Business or Rental Personal property Selling price of home not to include, Personal property. How to amend 2011 tax return turbotax Points, Selling expenses. How to amend 2011 tax return turbotax Home sold with undeducted points, Reminders Seller-paid, Seller-paid points. How to amend 2011 tax return turbotax Publications (see Tax help) R Real estate taxes, Settlement fees or closing costs. How to amend 2011 tax return turbotax , Real estate taxes. How to amend 2011 tax return turbotax Deducting in year of sale, Deducting Taxes in the Year of Sale Recapture of federal mortgage subsidy, Recapturing (Paying Back) a Federal Mortgage Subsidy Recapture of first-time homebuyer credit, Recapture of First-Time Homebuyer Credit Recording fees, Settlement fees or closing costs. How to amend 2011 tax return turbotax Recordkeeping, Adjusted Basis Reduced maximum exclusion, Reduced Maximum Exclusion Worksheet 3, Worksheet 3. How to amend 2011 tax return turbotax Reduced Maximum Exclusion Refinancing, Settlement fees or closing costs. How to amend 2011 tax return turbotax Relatives Sale of home to, Exception for sales to related persons. How to amend 2011 tax return turbotax Remainder interest Sale of, Sale of remainder interest. How to amend 2011 tax return turbotax Remodeling, Improvements. How to amend 2011 tax return turbotax , Exception. How to amend 2011 tax return turbotax (see also Improvements) Rental of home, Business Use or Rental of Home, Use test met for business part (with no business use in year of sale). How to amend 2011 tax return turbotax Before closing, by buyer, Settlement fees or closing costs. How to amend 2011 tax return turbotax Partial use, Property Used Partly for Business or Rental Repairs, Settlement fees or closing costs. How to amend 2011 tax return turbotax , Improvements. How to amend 2011 tax return turbotax , Repairs. How to amend 2011 tax return turbotax (see also Improvements) Reporting the sale, Reporting the Sale, Worksheet 2. How to amend 2011 tax return turbotax Taxable Gain on Sale of Home—Illustrated Example 3 for Emily White Repossession, Foreclosure or repossession. How to amend 2011 tax return turbotax Right-of-ways, Decreases to Basis S Safe harbors Distance safe harbor, Distance safe harbor. How to amend 2011 tax return turbotax Doctor's recommendation for sale, Doctor's recommendation safe harbor. How to amend 2011 tax return turbotax Unforeseeable events, Specific event safe harbors. How to amend 2011 tax return turbotax Sales commissions, Selling expenses. How to amend 2011 tax return turbotax , Settlement fees or closing costs. How to amend 2011 tax return turbotax Sales to related persons, Exception for sales to related persons. How to amend 2011 tax return turbotax Self-employed persons Change in status causing inability to pay basic expenses, Specific event safe harbors. How to amend 2011 tax return turbotax Seller-financed mortgages, Seller-financed mortgage. How to amend 2011 tax return turbotax Seller-paid points, Seller-paid points. How to amend 2011 tax return turbotax Selling expenses, Selling expenses. How to amend 2011 tax return turbotax Selling price, Selling Price Separate returns, Separate returns. How to amend 2011 tax return turbotax Settlement fees, Settlement fees or closing costs. How to amend 2011 tax return turbotax Spouse Death of (see Surviving spouse) Divorce, transfers subsequent to (see Divorce) Survey fees, Settlement fees or closing costs. How to amend 2011 tax return turbotax Surviving spouse Basis determination, Surviving spouse. How to amend 2011 tax return turbotax Ownership and use tests, Sale of main home by surviving spouse. How to amend 2011 tax return turbotax T Tax help, How To Get Tax Help Temporary absence, Temporary absence. How to amend 2011 tax return turbotax Temporary housing, Temporary housing. How to amend 2011 tax return turbotax Title insurance, Settlement fees or closing costs. How to amend 2011 tax return turbotax Title search fees, Settlement fees or closing costs. How to amend 2011 tax return turbotax Trading homes, Trading (exchanging) homes. How to amend 2011 tax return turbotax , Home received as trade. How to amend 2011 tax return turbotax Transfer taxes, Settlement fees or closing costs. How to amend 2011 tax return turbotax , Transfer taxes. How to amend 2011 tax return turbotax Transfer to spouse, Transfer to spouse. How to amend 2011 tax return turbotax After July 18, 1984, Transfers after July 18, 1984. How to amend 2011 tax return turbotax Before July 19, 1984, Transfers before July 19, 1984. How to amend 2011 tax return turbotax TTY/TDD information, How To Get Tax Help U Unemployment, Specific event safe harbors. How to amend 2011 tax return turbotax Unforeseen circumstances, Unforeseen Circumstances Uniformed services (see Armed forces) Use tests, Ownership and Use Tests, Ownership and use tests met at different times. How to amend 2011 tax return turbotax Utilities Charges for installing, Settlement fees or closing costs. How to amend 2011 tax return turbotax Charges related to occupancy of house before closing, Settlement fees or closing costs. How to amend 2011 tax return turbotax Energy conservation subsidy, Decreases to Basis Meter and connection charges for construction, Construction. How to amend 2011 tax return turbotax V Vacant land Sale of, Vacant land. How to amend 2011 tax return turbotax W Worksheets, Worksheets. How to amend 2011 tax return turbotax Adjusted basis (Worksheet 1), Determining Basis, Worksheet 1. How to amend 2011 tax return turbotax Adjusted Basis of Home Sold—Illustrated Example 1 for Peter and Betty Clark, Worksheet 1. How to amend 2011 tax return turbotax Adjusted Basis of Home Sold—Illustrated Example 3 for Emily White, Worksheet 1 Instructions. How to amend 2011 tax return turbotax Adjusted Basis of Home Sold Gain (or loss), exclusion, and taxable gain (Worksheet 2), Worksheet 2. How to amend 2011 tax return turbotax Taxable Gain on Sale of Home—Completed Example 1 for Amy, Worksheet 1. How to amend 2011 tax return turbotax Adjusted Basis of Home Sold—Illustrated Example 1 for Peter and Betty Clark, Worksheet 2. How to amend 2011 tax return turbotax Taxable Gain on Sale of Home—Illustrated Example 2 for Peter and Betty Clark, Worksheet 2. How to amend 2011 tax return turbotax Taxable Gain on Sale of Home—Illustrated Example 3 for Emily White, Worksheet 2. How to amend 2011 tax return turbotax Taxable Gain on Sale of Home Recordkeeping and, Adjusted Basis Reduced maximum exclusion (Worksheet 3), Worksheet 3. How to amend 2011 tax return turbotax Reduced Maximum Exclusion Prev  Up     Home   More Online Publications
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The How To Amend 2011 Tax Return Turbotax

How to amend 2011 tax return turbotax Publication 587 - Main Content Table of Contents Qualifying for a DeductionExclusive Use Regular Use Trade or Business Use Principal Place of Business Place To Meet Patients, Clients, or Customers Separate Structure Figuring the DeductionUsing Actual Expenses Using the Simplified Method Daycare Facility Standard meal and snack rates. How to amend 2011 tax return turbotax Sale or Exchange of Your HomeGain on Sale Depreciation Basis Adjustment Reporting the Sale More Information Business Furniture and EquipmentListed Property Property Bought for Business Use Personal Property Converted to Business Use Recordkeeping Where To DeductSelf-Employed Persons Employees Partners How To Get Tax HelpLow Income Taxpayer Clinics Worksheet To Figure the Deduction for Business Use of Your HomeInstructions for the Worksheet Worksheets To Figure the Deduction for Business Use of Your Home (Simplified Method) Instructions for the Simplified Method Worksheet Instructions for the Daycare Facility Worksheet Instructions for the Area Adjustment Worksheet Qualifying for a Deduction Generally, you cannot deduct items related to your home, such as mortgage interest, real estate taxes, utilities, maintenance, rent, depreciation, or property insurance, as business expenses. How to amend 2011 tax return turbotax However, you may be able to deduct expenses related to the business use of part of your home if you meet specific requirements. How to amend 2011 tax return turbotax Even then, the deductible amount of these types of expenses may be limited. How to amend 2011 tax return turbotax Use this section and Figure A, later, to decide if you can deduct expenses for the business use of your home. How to amend 2011 tax return turbotax To qualify to deduct expenses for business use of your home, you must use part of your home: Exclusively and regularly as your principal place of business (defined later), Exclusively and regularly as a place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, In the case of a separate structure which is not attached to your home, in connection with your trade or business, On a regular basis for certain storage use (see Storage of inventory or product samples , later), For rental use (see Publication 527), or As a daycare facility (see Daycare Facility , later). How to amend 2011 tax return turbotax Additional tests for employee use. How to amend 2011 tax return turbotax   If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. How to amend 2011 tax return turbotax You must meet the tests discussed earlier plus: Your business use must be for the convenience of your employer, and You must not rent any part of your home to your employer and use the rented portion to perform services as an employee for that employer. How to amend 2011 tax return turbotax If the use of the home office is merely appropriate and helpful, you cannot deduct expenses for the business use of your home. How to amend 2011 tax return turbotax Exclusive Use To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. How to amend 2011 tax return turbotax The area used for business can be a room or other separately identifiable space. How to amend 2011 tax return turbotax The space does not need to be marked off by a permanent partition. How to amend 2011 tax return turbotax You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes. How to amend 2011 tax return turbotax Example. How to amend 2011 tax return turbotax You are an attorney and use a den in your home to write legal briefs and prepare clients' tax returns. How to amend 2011 tax return turbotax Your family also uses the den for recreation. How to amend 2011 tax return turbotax The den is not used exclusively in your trade or business, so you cannot claim a deduction for the business use of the den. How to amend 2011 tax return turbotax Exceptions to Exclusive Use You do not have to meet the exclusive use test if either of the following applies. How to amend 2011 tax return turbotax You use part of your home for the storage of inventory or product samples (discussed next). How to amend 2011 tax return turbotax You use part of your home as a daycare facility, discussed later under Daycare Facility . How to amend 2011 tax return turbotax Note. How to amend 2011 tax return turbotax With the exception of these two uses, any portion of the home used for business purposes must meet the exclusive use test. How to amend 2011 tax return turbotax Storage of inventory or product samples. How to amend 2011 tax return turbotax    If you use part of your home for storage of inventory or product samples, you can deduct expenses for the business use of your home without meeting the exclusive use test. How to amend 2011 tax return turbotax However, you must meet all the following tests. How to amend 2011 tax return turbotax You sell products at wholesale or retail as your trade or business. How to amend 2011 tax return turbotax You keep the inventory or product samples in your home for use in your trade or business. How to amend 2011 tax return turbotax Your home is the only fixed location of your trade or business. How to amend 2011 tax return turbotax You use the storage space on a regular basis. How to amend 2011 tax return turbotax The space you use is a separately identifiable space suitable for storage. How to amend 2011 tax return turbotax Example. How to amend 2011 tax return turbotax Your home is the only fixed location of your business of selling mechanics' tools at retail. How to amend 2011 tax return turbotax You regularly use half of your basement for storage of inventory and product samples. How to amend 2011 tax return turbotax You sometimes use the area for personal purposes. How to amend 2011 tax return turbotax The expenses for the storage space are deductible even though you do not use this part of your basement exclusively for business. How to amend 2011 tax return turbotax Regular Use To qualify under the regular use test, you must use a specific area of your home for business on a regular basis. How to amend 2011 tax return turbotax Incidental or occasional business use is not regular use. How to amend 2011 tax return turbotax You must consider all facts and circumstances in determining whether your use is on a regular basis. How to amend 2011 tax return turbotax Trade or Business Use To qualify under the trade-or-business-use test, you must use part of your home in connection with a trade or business. How to amend 2011 tax return turbotax If you use your home for a profit-seeking activity that is not a trade or business, you cannot take a deduction for its business use. How to amend 2011 tax return turbotax Example. How to amend 2011 tax return turbotax You use part of your home exclusively and regularly to read financial periodicals and reports, clip bond coupons, and carry out similar activities related to your own investments. How to amend 2011 tax return turbotax You do not make investments as a broker or dealer. How to amend 2011 tax return turbotax So, your activities are not part of a trade or business and you cannot take a deduction for the business use of your home. How to amend 2011 tax return turbotax Principal Place of Business You can have more than one business location, including your home, for a single trade or business. How to amend 2011 tax return turbotax To qualify to deduct the expenses for the business use of your home under the principal place of business test, your home must be your principal place of business for that trade or business. How to amend 2011 tax return turbotax To determine whether your home is your principal place of business, you must consider: The relative importance of the activities performed at each place where you conduct business, and The amount of time spent at each place where you conduct business. How to amend 2011 tax return turbotax Your home office will qualify as your principal place of business if you meet the following requirements. How to amend 2011 tax return turbotax You use it exclusively and regularly for administrative or management activities of your trade or business. How to amend 2011 tax return turbotax You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. How to amend 2011 tax return turbotax If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. How to amend 2011 tax return turbotax However, see the later discussions under Place To Meet Patients, Clients, or Customers and Separate Structure for other ways to qualify to deduct home office expenses. How to amend 2011 tax return turbotax Administrative or management activities. How to amend 2011 tax return turbotax   There are many activities that are administrative or managerial in nature. How to amend 2011 tax return turbotax The following are a few examples. How to amend 2011 tax return turbotax Billing customers, clients, or patients. How to amend 2011 tax return turbotax Keeping books and records. How to amend 2011 tax return turbotax Ordering supplies. How to amend 2011 tax return turbotax Setting up appointments. How to amend 2011 tax return turbotax Forwarding orders or writing reports. How to amend 2011 tax return turbotax Administrative or management activities performed at other locations. How to amend 2011 tax return turbotax   The following activities performed by you or others will not disqualify your home office from being your principal place of business. How to amend 2011 tax return turbotax You have others conduct your administrative or management activities at locations other than your home. How to amend 2011 tax return turbotax (For example, another company does your billing from its place of business. How to amend 2011 tax return turbotax ) You conduct administrative or management activities at places that are not fixed locations of your business, such as in a car or a hotel room. How to amend 2011 tax return turbotax You occasionally conduct minimal administrative or management activities at a fixed location outside your home. How to amend 2011 tax return turbotax You conduct substantial nonadministrative or nonmanagement business activities at a fixed location outside your home. How to amend 2011 tax return turbotax (For example, you meet with or provide services to customers, clients, or patients at a fixed location of the business outside your home. How to amend 2011 tax return turbotax ) You have suitable space to conduct administrative or management activities outside your home, but choose to use your home office for those activities instead. How to amend 2011 tax return turbotax Please click here for the text description of the image. How to amend 2011 tax return turbotax Can you deduct business use of the home expenses? Example 1. How to amend 2011 tax return turbotax John is a self-employed plumber. How to amend 2011 tax return turbotax Most of John's time is spent at customers' homes and offices installing and repairing plumbing. How to amend 2011 tax return turbotax He has a small office in his home that he uses exclusively and regularly for the administrative or management activities of his business, such as phoning customers, ordering supplies, and keeping his books. How to amend 2011 tax return turbotax John writes up estimates and records of work completed at his customers' premises. How to amend 2011 tax return turbotax He does not conduct any substantial administrative or management activities at any fixed location other than his home office. How to amend 2011 tax return turbotax John does not do his own billing. How to amend 2011 tax return turbotax He uses a local bookkeeping service to bill his customers. How to amend 2011 tax return turbotax John's home office qualifies as his principal place of business for deducting expenses for its use. How to amend 2011 tax return turbotax He uses the home office for the administrative or managerial activities of his plumbing business and he has no other fixed location where he conducts these administrative or managerial activities. How to amend 2011 tax return turbotax His choice to have his billing done by another company does not disqualify his home office from being his principal place of business. How to amend 2011 tax return turbotax He meets all the qualifications, including principal place of business, so he can deduct expenses (subject to certain limitations, explained later) for the business use of his home. How to amend 2011 tax return turbotax Example 2. How to amend 2011 tax return turbotax Pamela is a self-employed sales representative for several different product lines. How to amend 2011 tax return turbotax She has an office in her home that she uses exclusively and regularly to set up appointments and write up orders and other reports for the companies whose products she sells. How to amend 2011 tax return turbotax She occasionally writes up orders and sets up appointments from her hotel room when she is away on business overnight. How to amend 2011 tax return turbotax Pamela's business is selling products to customers at various locations throughout her territory. How to amend 2011 tax return turbotax To make these sales, she regularly visits customers to explain the available products and take orders. How to amend 2011 tax return turbotax Pamela's home office qualifies as her principal place of business for deducting expenses for its use. How to amend 2011 tax return turbotax She conducts administrative or management activities there and she has no other fixed location where she conducts substantial administrative or management activities. How to amend 2011 tax return turbotax The fact that she conducts some administrative or management activities in her hotel room (not a fixed location) does not disqualify her home office from being her principal place of business. How to amend 2011 tax return turbotax She meets all the qualifications, including principal place of business, so she can deduct expenses (subject to certain limitations, explained later) for the business use of her home. How to amend 2011 tax return turbotax Example 3. How to amend 2011 tax return turbotax Paul is a self-employed anesthesiologist. How to amend 2011 tax return turbotax He spends the majority of his time administering anesthesia and postoperative care in three local hospitals. How to amend 2011 tax return turbotax One of the hospitals provides him with a small shared office where he could conduct administrative or management activities. How to amend 2011 tax return turbotax Paul very rarely uses the office the hospital provides. How to amend 2011 tax return turbotax He uses a room in his home that he has converted to an office. How to amend 2011 tax return turbotax He uses this room exclusively and regularly to conduct all the following activities. How to amend 2011 tax return turbotax Contacting patients, surgeons, and hospitals regarding scheduling. How to amend 2011 tax return turbotax Preparing for treatments and presentations. How to amend 2011 tax return turbotax Maintaining billing records and patient logs. How to amend 2011 tax return turbotax Satisfying continuing medical education requirements. How to amend 2011 tax return turbotax Reading medical journals and books. How to amend 2011 tax return turbotax Paul's home office qualifies as his principal place of business for deducting expenses for its use. How to amend 2011 tax return turbotax He conducts administrative or management activities for his business as an anesthesiologist there and he has no other fixed location where he conducts substantial administrative or management activities for this business. How to amend 2011 tax return turbotax His choice to use his home office instead of the one provided by the hospital does not disqualify his home office from being his principal place of business. How to amend 2011 tax return turbotax His performance of substantial nonadministrative or nonmanagement activities at fixed locations outside his home also does not disqualify his home office from being his principal place of business. How to amend 2011 tax return turbotax He meets all the qualifications, including principal place of business, so he can deduct expenses (subject to certain limitations, explained later) for the business use of his home. How to amend 2011 tax return turbotax Example 4. How to amend 2011 tax return turbotax Kathleen is employed as a teacher. How to amend 2011 tax return turbotax She is required to teach and meet with students at the school and to grade papers and tests. How to amend 2011 tax return turbotax The school provides her with a small office where she can work on her lesson plans, grade papers and tests, and meet with parents and students. How to amend 2011 tax return turbotax The school does not require her to work at home. How to amend 2011 tax return turbotax Kathleen prefers to use the office she has set up in her home and does not use the one provided by the school. How to amend 2011 tax return turbotax She uses this home office exclusively and regularly for the administrative duties of her teaching job. How to amend 2011 tax return turbotax Kathleen must meet the convenience-of-the-employer test, even if her home qualifies as her principal place of business for deducting expenses for its use. How to amend 2011 tax return turbotax Her employer provides her with an office and does not require her to work at home, so she does not meet the convenience-of-the-employer test and cannot claim a deduction for the business use of her home. How to amend 2011 tax return turbotax More Than One Trade or Business The same home office can be the principal place of business for two or more separate business activities. How to amend 2011 tax return turbotax Whether your home office is the principal place of business for more than one business activity must be determined separately for each of your trade or business activities. How to amend 2011 tax return turbotax You must use the home office exclusively and regularly for one or more of the following purposes. How to amend 2011 tax return turbotax As the principal place of business for one or more of your trades or businesses. How to amend 2011 tax return turbotax As a place to meet or deal with patients, clients, or customers in the normal course of one or more of your trades or businesses. How to amend 2011 tax return turbotax If your home office is a separate structure, in connection with one or more of your trades or businesses. How to amend 2011 tax return turbotax You can use your home office for more than one business activity, but you cannot use it for any nonbusiness (i. How to amend 2011 tax return turbotax e. How to amend 2011 tax return turbotax , personal) activities. How to amend 2011 tax return turbotax If you are an employee, any use of the home office in connection with your employment must be for the convenience of your employer. How to amend 2011 tax return turbotax See Rental to employer , later, if you rent part of your home to your employer. How to amend 2011 tax return turbotax Example. How to amend 2011 tax return turbotax Tracy White is employed as a teacher. How to amend 2011 tax return turbotax Her principal place of work is the school, which provides her office space to do her school work. How to amend 2011 tax return turbotax She also has a mail order jewelry business. How to amend 2011 tax return turbotax All her work in the jewelry business is done in her home office and the office is used exclusively for that business. How to amend 2011 tax return turbotax If she meets all the other tests, she can deduct expenses for the business use of her home for the jewelry business. How to amend 2011 tax return turbotax If Tracy also uses the office for work related to her teaching, she must meet the exclusive use test for both businesses to qualify for the deduction. How to amend 2011 tax return turbotax As an employee, Tracy must also meet the convenience-of-the-employer test to qualify for the deduction. How to amend 2011 tax return turbotax She does not meet this test for her work as a teacher, so she cannot claim a deduction for the business use of her home for either activity. How to amend 2011 tax return turbotax Place To Meet Patients, Clients, or Customers If you meet or deal with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business if you meet both the following tests. How to amend 2011 tax return turbotax You physically meet with patients, clients, or customers on your premises. How to amend 2011 tax return turbotax Their use of your home is substantial and integral to the conduct of your business. How to amend 2011 tax return turbotax Doctors, dentists, attorneys, and other professionals who maintain offices in their homes generally will meet this requirement. How to amend 2011 tax return turbotax Using your home for occasional meetings and telephone calls will not qualify you to deduct expenses for the business use of your home. How to amend 2011 tax return turbotax The part of your home you use exclusively and regularly to meet patients, clients, or customers does not have to be your principal place of business. How to amend 2011 tax return turbotax Example. How to amend 2011 tax return turbotax June Quill, a self-employed attorney, works 3 days a week in her city office. How to amend 2011 tax return turbotax She works 2 days a week in her home office used only for business. How to amend 2011 tax return turbotax She regularly meets clients there. How to amend 2011 tax return turbotax Her home office qualifies for a business deduction because she meets clients there in the normal course of her business. How to amend 2011 tax return turbotax Separate Structure You can deduct expenses for a separate free-standing structure, such as a studio, workshop, garage, or barn, if you use it exclusively and regularly for your business. How to amend 2011 tax return turbotax The structure does not have to be your principal place of business or a place where you meet patients, clients, or customers. How to amend 2011 tax return turbotax Example. How to amend 2011 tax return turbotax John Berry operates a floral shop in town. How to amend 2011 tax return turbotax He grows the plants for his shop in a greenhouse behind his home. How to amend 2011 tax return turbotax He uses the greenhouse exclusively and regularly in his business, so he can deduct the expenses for its use, subject to certain limitations, explained later. How to amend 2011 tax return turbotax Figuring the Deduction After you determine that you meet the tests under Qualifying for a Deduction , you can begin to figure how much you can deduct. How to amend 2011 tax return turbotax When figuring the amount you can deduct for the business use of your home, you will use either your actual expenses or a simplified method. How to amend 2011 tax return turbotax Electing to use the simplified method. How to amend 2011 tax return turbotax   The simplified method is an alternative to the calculation, allocation, and substantiation of actual expenses. How to amend 2011 tax return turbotax You choose whether or not to figure your deduction using the simplified method each taxable year. How to amend 2011 tax return turbotax See Using the Simplified Method , later. How to amend 2011 tax return turbotax Rental to employer. How to amend 2011 tax return turbotax   If you rent part of your home to your employer and you use the rented part in performing services for your employer as an employee, your deduction for the business use of your home is limited. How to amend 2011 tax return turbotax You can deduct mortgage interest, qualified mortgage insurance premiums, real estate taxes, and personal casualty losses for the rented part, subject to any limitations. How to amend 2011 tax return turbotax However, you cannot deduct otherwise allowable trade or business expenses, business casualty losses, or depreciation related to the use of your home (or use the simplified method as an alternative to deducting these actual expenses) in performing services for your employer. How to amend 2011 tax return turbotax Using Actual Expenses If you do not or cannot elect to use the simplified method for a home, you will figure your deduction for that home using your actual expenses. How to amend 2011 tax return turbotax You will also need to figure the percentage of your home used for business and the limit on the deduction. How to amend 2011 tax return turbotax If you are an employee or a partner, or you use your home in your farming business and you file Schedule F (Form 1040), you can use the Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication, to help you figure your deduction. How to amend 2011 tax return turbotax If you use your home in a trade or business and you file Schedule C (Form 1040), you will use Form 8829 to figure your deduction. How to amend 2011 tax return turbotax Part-year use. How to amend 2011 tax return turbotax   You cannot deduct expenses for the business use of your home incurred during any part of the year you did not use your home for business purposes. How to amend 2011 tax return turbotax For example, if you begin using part of your home for business on July 1, and you meet all the tests from that date until the end of the year, consider only your expenses for the last half of the year in figuring your allowable deduction. How to amend 2011 tax return turbotax Expenses related to tax-exempt income. How to amend 2011 tax return turbotax   Generally, you cannot deduct expenses that are related to tax-exempt allowances. How to amend 2011 tax return turbotax However, if you receive a tax-exempt parsonage allowance or a tax-exempt military allowance, your expenses for mortgage interest and real estate taxes are deductible under the normal rules. How to amend 2011 tax return turbotax No deduction is allowed for other expenses related to the tax-exempt allowance. How to amend 2011 tax return turbotax   If your housing is provided free of charge and the value of the housing is tax exempt, you cannot deduct the rental value of any portion of the housing. How to amend 2011 tax return turbotax Actual Expenses You must divide the expenses of operating your home between personal and business use. How to amend 2011 tax return turbotax The part of a home operating expense you can use to figure your deduction depends on both of the following. How to amend 2011 tax return turbotax Whether the expense is direct, indirect, or unrelated. How to amend 2011 tax return turbotax The percentage of your home used for business. How to amend 2011 tax return turbotax Table 1, next, describes the types of expenses you may have and the extent to which they are deductible. How to amend 2011 tax return turbotax Table 1. How to amend 2011 tax return turbotax Types of Expenses  Expense  Description  Deductibility Direct Expenses only for  the business part  of your home. How to amend 2011 tax return turbotax Deductible in full. How to amend 2011 tax return turbotax *   Examples:  Painting or repairs  only in the area  used for business. How to amend 2011 tax return turbotax Exception: May be only partially  deductible in a daycare facility. How to amend 2011 tax return turbotax See Daycare Facility , later. How to amend 2011 tax return turbotax Indirect Expenses for  keeping up and running your  entire home. How to amend 2011 tax return turbotax Deductible based on the percentage of your home used for business. How to amend 2011 tax return turbotax *   Examples:  Insurance, utilities, and  general repairs. How to amend 2011 tax return turbotax   Unrelated Expenses only for  the parts of your  home not used  for business. How to amend 2011 tax return turbotax Not deductible. How to amend 2011 tax return turbotax   Examples:  Lawn care or painting  a room not used  for business. How to amend 2011 tax return turbotax   *Subject to the deduction limit, discussed later. How to amend 2011 tax return turbotax Form 8829 and the Worksheet To Figure the Deduction for Business Use of Your Home have separate columns for direct and indirect expenses. How to amend 2011 tax return turbotax Certain expenses are deductible whether or not you use your home for business. How to amend 2011 tax return turbotax If you qualify to deduct business use of the home expenses, use the business percentage of these expenses to figure your total business use of the home deduction. How to amend 2011 tax return turbotax These expenses include the following. How to amend 2011 tax return turbotax Real estate taxes. How to amend 2011 tax return turbotax Qualified mortgage insurance premiums. How to amend 2011 tax return turbotax Deductible mortgage interest. How to amend 2011 tax return turbotax Casualty losses. How to amend 2011 tax return turbotax Other expenses are deductible only if you use your home for business. How to amend 2011 tax return turbotax You can use the business percentage of these expenses to figure your total business use of the home deduction. How to amend 2011 tax return turbotax These expenses generally include (but are not limited to) the following. How to amend 2011 tax return turbotax Depreciation (covered under Depreciating Your Home , later). How to amend 2011 tax return turbotax Insurance. How to amend 2011 tax return turbotax Rent paid for the use of property you do not own but use in your trade or business. How to amend 2011 tax return turbotax Repairs. How to amend 2011 tax return turbotax Security system. How to amend 2011 tax return turbotax Utilities and services. How to amend 2011 tax return turbotax Real estate taxes. How to amend 2011 tax return turbotax   To figure the business part of your real estate taxes, multiply the real estate taxes paid by the percentage of your home used for business. How to amend 2011 tax return turbotax   For more information on the deduction for real estate taxes, see Publication 530, Tax Information for Homeowners. How to amend 2011 tax return turbotax Deductible mortgage interest. How to amend 2011 tax return turbotax   To figure the business part of your deductible mortgage interest, multiply this interest by the percentage of your home used for business. How to amend 2011 tax return turbotax You can include interest on a second mortgage in this computation. How to amend 2011 tax return turbotax If your total mortgage debt is more than $1,000,000 or your home equity debt is more than $100,000, your deduction may be limited. How to amend 2011 tax return turbotax For more information on what interest is deductible, see Publication 936, Home Mortgage Interest Deduction. How to amend 2011 tax return turbotax Qualified mortgage insurance premiums. How to amend 2011 tax return turbotax   To figure the business part of your qualified mortgage insurance premiums, multiply the premiums by the percentage of your home used for business. How to amend 2011 tax return turbotax You can include premiums for insurance on a second mortgage in this computation. How to amend 2011 tax return turbotax If your adjusted gross income is more than $100,000 ($50,000 if your filing status is married filing separately), your deduction may be limited. How to amend 2011 tax return turbotax For more information, see Publication 936, and Line 13 in the Instructions for Schedule A (Form 1040). How to amend 2011 tax return turbotax Casualty losses. How to amend 2011 tax return turbotax    If you have a casualty loss on your home that you use for business, treat the casualty loss as a direct expense, an indirect expense, or an unrelated expense, depending on the property affected. How to amend 2011 tax return turbotax A direct expense is the loss on the portion of the property you use only in your business. How to amend 2011 tax return turbotax Use the entire loss to figure the business use of the home deduction. How to amend 2011 tax return turbotax An indirect expense is the loss on property you use for both business and personal purposes. How to amend 2011 tax return turbotax Use only the business portion to figure the deduction. How to amend 2011 tax return turbotax An unrelated expense is the loss on property you do not use in your business. How to amend 2011 tax return turbotax Do not use any of the loss to figure the deduction. How to amend 2011 tax return turbotax Example. How to amend 2011 tax return turbotax You meet the rules to take a deduction for an office in your home that is 10% of the total area of your house. How to amend 2011 tax return turbotax A storm damages your roof. How to amend 2011 tax return turbotax This is an indirect expense as the roof is part of the whole house and is considered to be used both for business and personal purposes. How to amend 2011 tax return turbotax You would complete Form 4684, Casualties and Thefts, to report your loss. How to amend 2011 tax return turbotax You complete both section A (Personal Use Property) and section B (Business and Income-Producing Property) as your home is used both for business and personal purposes. How to amend 2011 tax return turbotax Since you use 90% of your home for personal purposes, use 90% of the cost or adjusted basis of your home, insurance or other reimbursement, and fair market value, both before and after the storm, to figure the amounts to enter on lines 2, 3, 5, and 6 of Form 4684. How to amend 2011 tax return turbotax Since you use 10% of your home for business purposes, use 10% of the cost or adjusted basis of your home, insurance or other reimbursement, and fair market value, both before and after the storm, to figure the amounts to enter on lines 20, 21, 23, and 24 of Form 4684. How to amend 2011 tax return turbotax Forms and worksheets to use. How to amend 2011 tax return turbotax   If you are filing Schedule C (Form 1040), get Form 8829 and follow the instructions for casualty losses. How to amend 2011 tax return turbotax If you are an employee or a partner, or you file Schedule F (Form 1040), use the Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication. How to amend 2011 tax return turbotax You will also need to get Form 4684. How to amend 2011 tax return turbotax More information. How to amend 2011 tax return turbotax   For more information on casualty losses, see Publication 547, Casualties, Disasters, and Thefts. How to amend 2011 tax return turbotax Insurance. How to amend 2011 tax return turbotax   You can deduct the cost of insurance that covers the business part of your home. How to amend 2011 tax return turbotax However, if your insurance premium gives you coverage for a period that extends past the end of your tax year, you can deduct only the business percentage of the part of the premium that gives you coverage for your tax year. How to amend 2011 tax return turbotax You can deduct the business percentage of the part that applies to the following year in that year. How to amend 2011 tax return turbotax Rent. How to amend 2011 tax return turbotax   If you rent the home you occupy and meet the requirements for business use of the home, you can deduct part of the rent you pay. How to amend 2011 tax return turbotax To figure your deduction, multiply your rent payments by the percentage of your home used for business. How to amend 2011 tax return turbotax   If you own your home, you cannot deduct the fair rental value of your home. How to amend 2011 tax return turbotax However, see Depreciating Your Home , later. How to amend 2011 tax return turbotax Repairs. How to amend 2011 tax return turbotax   The cost of repairs that relate to your business, including labor (other than your own labor), is a deductible expense. How to amend 2011 tax return turbotax For example, a furnace repair benefits the entire home. How to amend 2011 tax return turbotax If you use 10% of your home for business, you can deduct 10% of the cost of the furnace repair. How to amend 2011 tax return turbotax   Repairs keep your home in good working order over its useful life. How to amend 2011 tax return turbotax Examples of common repairs are patching walls and floors, painting, wallpapering, repairing roofs and gutters, and mending leaks. How to amend 2011 tax return turbotax However, repairs are sometimes treated as a permanent improvement and are not deductible. How to amend 2011 tax return turbotax See Permanent improvements , later, under Depreciating Your Home. How to amend 2011 tax return turbotax Security system. How to amend 2011 tax return turbotax   If you install a security system that protects all the doors and windows in your home, you can deduct the business part of the expenses you incur to maintain and monitor the system. How to amend 2011 tax return turbotax You also can take a depreciation deduction for the part of the cost of the security system relating to the business use of your home. How to amend 2011 tax return turbotax Utilities and services. How to amend 2011 tax return turbotax   Expenses for utilities and services, such as electricity, gas, trash removal, and cleaning services, are primarily personal expenses. How to amend 2011 tax return turbotax However, if you use part of your home for business, you can deduct the business part of these expenses. How to amend 2011 tax return turbotax Generally, the business percentage for utilities is the same as the percentage of your home used for business. How to amend 2011 tax return turbotax Telephone. How to amend 2011 tax return turbotax   The basic local telephone service charge, including taxes, for the first telephone line into your home (i. How to amend 2011 tax return turbotax e. How to amend 2011 tax return turbotax , landline) is a nondeductible personal expense. How to amend 2011 tax return turbotax However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses. How to amend 2011 tax return turbotax Do not include these expenses as a cost of using your home for business. How to amend 2011 tax return turbotax Deduct these charges separately on the appropriate form or schedule. How to amend 2011 tax return turbotax For example, if you file Schedule C (Form 1040), deduct these expenses on line 25, Utilities (instead of line 30, Expenses for business use of your home). How to amend 2011 tax return turbotax Depreciating Your Home If you own your home and qualify to deduct expenses for its business use, you can claim a deduction for depreciation. How to amend 2011 tax return turbotax Depreciation is an allowance for the wear and tear on the part of your home used for business. How to amend 2011 tax return turbotax You cannot depreciate the cost or value of the land. How to amend 2011 tax return turbotax You recover its cost when you sell or otherwise dispose of the property. How to amend 2011 tax return turbotax Before you figure your depreciation deduction, you need to know the following information. How to amend 2011 tax return turbotax The month and year you started using your home for business. How to amend 2011 tax return turbotax The adjusted basis and fair market value of your home (excluding land) at the time you began using it for business. How to amend 2011 tax return turbotax The cost of any improvements before and after you began using the property for business. How to amend 2011 tax return turbotax The percentage of your home used for business. How to amend 2011 tax return turbotax See Business Percentage , later. How to amend 2011 tax return turbotax Adjusted basis defined. How to amend 2011 tax return turbotax   The adjusted basis of your home is generally its cost, plus the cost of any permanent improvements you made to it, minus any casualty losses or depreciation deducted in earlier tax years. How to amend 2011 tax return turbotax For a discussion of adjusted basis, see Publication 551. How to amend 2011 tax return turbotax Permanent improvements. How to amend 2011 tax return turbotax   A permanent improvement increases the value of property, adds to its life, or gives it a new or different use. How to amend 2011 tax return turbotax Examples of improvements are replacing electric wiring or plumbing, adding a new roof or addition, paneling, or remodeling. How to amend 2011 tax return turbotax    You must carefully distinguish between repairs and improvements. How to amend 2011 tax return turbotax See Repairs , earlier, under Actual Expenses. How to amend 2011 tax return turbotax You also must keep accurate records of these expenses. How to amend 2011 tax return turbotax These records will help you decide whether an expense is a deductible or a capital (added to the basis) expense. How to amend 2011 tax return turbotax However, if you make repairs as part of an extensive remodeling or restoration of your home, the entire job is an improvement. How to amend 2011 tax return turbotax Example. How to amend 2011 tax return turbotax You buy an older home and fix up two rooms as a beauty salon. How to amend 2011 tax return turbotax You patch the plaster on the ceilings and walls, paint, repair the floor, install an outside door, and install new wiring, plumbing, and other equipment. How to amend 2011 tax return turbotax Normally, the patching, painting, and floor work are repairs and the other expenses are permanent improvements. How to amend 2011 tax return turbotax However, because the work gives your property a new use, the entire remodeling job is a permanent improvement and its cost is added to the basis of the property. How to amend 2011 tax return turbotax You cannot deduct any portion of it as a repair expense. How to amend 2011 tax return turbotax Adjusting for depreciation deducted in earlier years. How to amend 2011 tax return turbotax   Decrease the basis of your property by the depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you properly selected. How to amend 2011 tax return turbotax If you deducted less depreciation than you could have under the method you selected, decrease the basis by the amount you could have deducted under that method. How to amend 2011 tax return turbotax If you did not deduct any depreciation, decrease the basis by the amount you could have deducted. How to amend 2011 tax return turbotax   If you deducted more depreciation than you should have, decrease your basis by the amount you should have deducted, plus the part of the excess depreciation you deducted that actually decreased your tax liability for any year. How to amend 2011 tax return turbotax   If you deducted the incorrect amount of depreciation, see Publication 946. How to amend 2011 tax return turbotax Fair market value defined. How to amend 2011 tax return turbotax   The fair market value of your home is the price at which the property would change hands between a buyer and a seller, neither having to buy or sell, and both having reasonable knowledge of all necessary facts. How to amend 2011 tax return turbotax Sales of similar property, on or about the date you begin using your home for business, may be helpful in determining the property's fair market value. How to amend 2011 tax return turbotax Figuring the depreciation deduction for the current year. How to amend 2011 tax return turbotax   If you began using your home for business before 2013, continue to use the same depreciation method you used in past tax years. How to amend 2011 tax return turbotax   If you began using your home for business for the first time in 2013, depreciate the business part as nonresidential real property under the modified accelerated cost recovery system (MACRS). How to amend 2011 tax return turbotax Under MACRS, nonresidential real property is depreciated using the straight line method over 39 years. How to amend 2011 tax return turbotax For more information on MACRS and other methods of depreciation, see Publication 946. How to amend 2011 tax return turbotax   To figure the depreciation deduction, you must first figure the part of the cost of your home that can be depreciated (depreciable basis). How to amend 2011 tax return turbotax The depreciable basis is figured by multiplying the percentage of your home used for business by the smaller of the following. How to amend 2011 tax return turbotax The adjusted basis of your home (excluding land) on the date you began using your home for business. How to amend 2011 tax return turbotax The fair market value of your home (excluding land) on the date you began using your home for business. How to amend 2011 tax return turbotax Depreciation table. How to amend 2011 tax return turbotax   If 2013 was the first year you used your home for business, you can figure your 2013 depreciation for the business part of your home by using the appropriate percentage from the following table. How to amend 2011 tax return turbotax Table 2. How to amend 2011 tax return turbotax MACRS Percentage Table for 39-Year Nonresidential Real Property Month First Used for Business Percentage To Use 1 2. How to amend 2011 tax return turbotax 461% 2 2. How to amend 2011 tax return turbotax 247% 3 2. How to amend 2011 tax return turbotax 033% 4 1. How to amend 2011 tax return turbotax 819% 5 1. How to amend 2011 tax return turbotax 605% 6 1. How to amend 2011 tax return turbotax 391% 7 1. How to amend 2011 tax return turbotax 177% 8 0. How to amend 2011 tax return turbotax 963% 9 0. How to amend 2011 tax return turbotax 749% 10 0. How to amend 2011 tax return turbotax 535% 11 0. How to amend 2011 tax return turbotax 321% 12 0. How to amend 2011 tax return turbotax 107%   Multiply the depreciable basis of the business part of your home by the percentage from the table for the first month you use your home for business. How to amend 2011 tax return turbotax See Publication 946 for the percentages for the remaining tax years of the recovery period. How to amend 2011 tax return turbotax Example. How to amend 2011 tax return turbotax In May, George Miller began to use one room in his home exclusively and regularly to meet clients. How to amend 2011 tax return turbotax This room is 8% of the square footage of his home. How to amend 2011 tax return turbotax He bought the home in 2003 for $125,000. How to amend 2011 tax return turbotax He determined from his property tax records that his adjusted basis in the house (exclusive of land) is $115,000. How to amend 2011 tax return turbotax In May, the house had a fair market value of $165,000. How to amend 2011 tax return turbotax He multiplies his adjusted basis of $115,000 (which is less than the fair market value) by 8%. How to amend 2011 tax return turbotax The result is $9,200, his depreciable basis for the business part of the house. How to amend 2011 tax return turbotax George files his return based on the calendar year. How to amend 2011 tax return turbotax May is the 5th month of his tax year. How to amend 2011 tax return turbotax He multiplies his depreciable basis of $9,200 by 1. How to amend 2011 tax return turbotax 605% (. How to amend 2011 tax return turbotax 01605), the percentage from the table for the 5th month. How to amend 2011 tax return turbotax His depreciation deduction is $147. How to amend 2011 tax return turbotax 66. How to amend 2011 tax return turbotax Depreciating permanent improvements. How to amend 2011 tax return turbotax   Add the costs of permanent improvements made before you began using your home for business to the basis of your property. How to amend 2011 tax return turbotax Depreciate these costs as part of the cost of your home as explained earlier. How to amend 2011 tax return turbotax The costs of improvements made after you begin using your home for business (that affect the business part of your home, such as a new roof) are depreciated separately. How to amend 2011 tax return turbotax Multiply the cost of the improvement by the business-use percentage and depreciate the result over the recovery period that would apply to your home if you began using it for business at the same time as the improvement. How to amend 2011 tax return turbotax For improvements made this year, the recovery period is 39 years. How to amend 2011 tax return turbotax For the percentage to use for the first year, see Table 2, earlier. How to amend 2011 tax return turbotax For more information on recovery periods, see Publication 946. How to amend 2011 tax return turbotax Business Percentage To find the business percentage, compare the size of the part of your home that you use for business to your whole house. How to amend 2011 tax return turbotax Use the resulting percentage to figure the business part of the expenses for operating your entire home. How to amend 2011 tax return turbotax You can use any reasonable method to determine the business percentage. How to amend 2011 tax return turbotax The following are two commonly used methods for figuring the percentage. How to amend 2011 tax return turbotax Divide the area (length multiplied by the width) used for business by the total area of your home. How to amend 2011 tax return turbotax If the rooms in your home are all about the same size, you can divide the number of rooms used for business by the total number of rooms in your home. How to amend 2011 tax return turbotax Example 1. How to amend 2011 tax return turbotax Your office is 240 square feet (12 feet × 20 feet). How to amend 2011 tax return turbotax Your home is 1,200 square feet. How to amend 2011 tax return turbotax Your office is 20% (240 ÷ 1,200) of the total area of your home. How to amend 2011 tax return turbotax Your business percentage is 20%. How to amend 2011 tax return turbotax Example 2. How to amend 2011 tax return turbotax You use one room in your home for business. How to amend 2011 tax return turbotax Your home has 10 rooms, all about equal size. How to amend 2011 tax return turbotax Your office is 10% (1 ÷ 10) of the total area of your home. How to amend 2011 tax return turbotax Your business percentage is 10%. How to amend 2011 tax return turbotax Use lines 1-7 of Form 8829, or lines 1-3 on the Worksheet To Figure the Deduction for Business Use of Your Home (near the end of this publication) to figure your business percentage. How to amend 2011 tax return turbotax Deduction Limit If your gross income from the business use of your home equals or exceeds your total business expenses (including depreciation), you can deduct all your business expenses related to the use of your home. How to amend 2011 tax return turbotax If your gross income from the business use of your home is less than your total business expenses, your deduction for certain expenses for the business use of your home is limited. How to amend 2011 tax return turbotax Your deduction of otherwise nondeductible expenses, such as insurance, utilities, and depreciation of your home (with depreciation of your home taken last), that are allocable to the business, is limited to the gross income from the business use of your home minus the sum of the following. How to amend 2011 tax return turbotax The business part of expenses you could deduct even if you did not use your home for business (such as mortgage interest, real estate taxes, and casualty and theft losses that are allowable as itemized deductions on Schedule A (Form 1040)). How to amend 2011 tax return turbotax These expenses are discussed in detail under Actual Expenses , earlier. How to amend 2011 tax return turbotax The business expenses that relate to the business activity in the home (for example, business phone, supplies, and depreciation on equipment), but not to the use of the home itself. How to amend 2011 tax return turbotax If you are self-employed, do not include in (2) above your deduction for one-half of your self-employment tax. How to amend 2011 tax return turbotax Carryover of unallowed expenses. How to amend 2011 tax return turbotax   If your deductions are greater than the current year's limit, you can carry over the excess to the next year in which you use actual expenses. How to amend 2011 tax return turbotax They are subject to the deduction limit for that year, whether or not you live in the same home during that year. How to amend 2011 tax return turbotax Figuring the deduction limit and carryover. How to amend 2011 tax return turbotax   If you are an employee or a partner, or you file Schedule F (Form 1040), use the Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication. How to amend 2011 tax return turbotax If you file Schedule C (Form 1040), figure your deduction limit and carryover on Form 8829. How to amend 2011 tax return turbotax Example. How to amend 2011 tax return turbotax You meet the requirements for deducting expenses for the business use of your home. How to amend 2011 tax return turbotax You use 20% of your home for business. How to amend 2011 tax return turbotax In 2013, your business expenses and the expenses for the business use of your home are deducted from your gross income in the following order. How to amend 2011 tax return turbotax    Gross income from business $6,000 Minus:   Deductible mortgage interest and real estate taxes (20%) 3,000 Business expenses not related to the use of your home (100%) (business phone, supplies, and depreciation on equipment) 2,000 Deduction limit $1,000 Minus other expenses allocable to business use of home:   Maintenance, insurance, and utilities (20%) 800 Depreciation allowed (20% = $1,600 allowable, but subject to balance of deduction limit) 200 Other expenses up to the deduction limit $1,000 Depreciation carryover to 2014 ($1,600 − $200) (subject to deduction limit in 2014) $1,400   You can deduct all of the business part of your deductible mortgage interest and real estate taxes ($3,000). How to amend 2011 tax return turbotax You also can deduct all of your business expenses not related to the use of your home ($2,000). How to amend 2011 tax return turbotax Additionally, you can deduct all of the business part of your expenses for maintenance, insurance, and utilities, because the total ($800) is less than the $1,000 deduction limit. How to amend 2011 tax return turbotax Your deduction for depreciation for the business use of your home is limited to $200 ($1,000 minus $800) because of the deduction limit. How to amend 2011 tax return turbotax You can carry over the $1,400 balance and add it to your depreciation for 2014, subject to your deduction limit in 2014. How to amend 2011 tax return turbotax More than one place of business. How to amend 2011 tax return turbotax   If part of the gross income from your trade or business is from the business use of part of your home and part is from a place other than your home, you must determine the part of your gross income from the business use of your home before you figure the deduction limit. How to amend 2011 tax return turbotax In making this determination, consider the time you spend at each location, the business investment in each location, and any other relevant facts and circumstances. How to amend 2011 tax return turbotax If your home office qualifies as your principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. How to amend 2011 tax return turbotax For more information on transportation costs, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. How to amend 2011 tax return turbotax Using the Simplified Method The simplified method is an alternative to the calculation, allocation, and substantiation of actual expenses. How to amend 2011 tax return turbotax In most cases, you will figure your deduction by multiplying $5, the prescribed rate, by the area of your home used for a qualified business use. How to amend 2011 tax return turbotax The area you use to figure your deduction is limited to 300 square feet. How to amend 2011 tax return turbotax See Simplified Amount , later, for information about figuring the amount of the deduction. How to amend 2011 tax return turbotax For more information about the simplified method, see Revenue Procedure 2013-13, 2013-06 I. How to amend 2011 tax return turbotax R. How to amend 2011 tax return turbotax B. How to amend 2011 tax return turbotax 478, available at www. How to amend 2011 tax return turbotax irs. How to amend 2011 tax return turbotax gov/irb/2013-06_IRB/ar09. How to amend 2011 tax return turbotax html. How to amend 2011 tax return turbotax Actual expenses and depreciation of your home. How to amend 2011 tax return turbotax   If you elect to use the simplified method, you cannot deduct any actual expenses for the business except for business expenses that are not related to the use of the home. How to amend 2011 tax return turbotax You also cannot deduct any depreciation (including any additional first-year depreciation) or section 179 expense for the portion of the home that is used for a qualified business use. How to amend 2011 tax return turbotax The depreciation deduction allowable for that portion of the home is deemed to be zero for a year you use the simplified method. How to amend 2011 tax return turbotax If you figure your deduction for business use of the home using actual expenses in a subsequent year, you will have to use the appropriate optional depreciation table for MACRS to figure your depreciation. How to amend 2011 tax return turbotax More information. How to amend 2011 tax return turbotax   For more information about claiming depreciation in a subsequent year, see Revenue Procedure 2013-13, 2013-06 I. How to amend 2011 tax return turbotax R. How to amend 2011 tax return turbotax B. How to amend 2011 tax return turbotax 478, available at www. How to amend 2011 tax return turbotax irs. How to amend 2011 tax return turbotax gov/irb/2013-06_IRB/ar09. How to amend 2011 tax return turbotax html. How to amend 2011 tax return turbotax See Publication 946 for the optional depreciation tables Although you cannot deduct any depreciation or section 179 expense for the portion of your home used for a qualified business use, you may still claim depreciation or the section 179 expense deduction on other assets used in the business (for example, furniture and equipment). How to amend 2011 tax return turbotax Expenses deductible without regard to business use. How to amend 2011 tax return turbotax   When using the simplified method, treat as personal expenses those business expenses related to the use of the home that are deductible without regard to whether there is a qualified business use of the home. How to amend 2011 tax return turbotax These expenses include mortgage interest, real estate taxes, and casualty losses, subject to any limitations. How to amend 2011 tax return turbotax See Where To Deduct , later. How to amend 2011 tax return turbotax If you also rent part of your home, you must still allocate these expenses between rental use and personal use (for this purpose, personal use includes business use reported using the simplified method). How to amend 2011 tax return turbotax No deduction of carryover of actual expenses. How to amend 2011 tax return turbotax   If you used actual expenses to figure your deduction for business use of the home in a prior year and your deduction was limited, you cannot deduct the disallowed amount carried over from the prior year during a year you figure your deduction using the simplified method. How to amend 2011 tax return turbotax Instead, you will continue to carry over the disallowed amount to the next year that you use actual expenses to figure your deduction. How to amend 2011 tax return turbotax Electing the Simplified Method You choose whether or not to figure your deduction using the simplified method each taxable year. How to amend 2011 tax return turbotax Make the election for a home by using the simplified method to figure the deduction for the qualified business use of that home on a timely filed, original federal income tax return. How to amend 2011 tax return turbotax An election for a taxable year, once made, is irrevocable. How to amend 2011 tax return turbotax A change from using the simplified method in one year to actual expenses in a succeeding taxable year, or vice-versa, is not a change in method of accounting and does not require the consent of the Commissioner. How to amend 2011 tax return turbotax Shared use. How to amend 2011 tax return turbotax   If you share your home with someone else who also uses the home in a business that qualifies for this deduction, each of you make your own election. How to amend 2011 tax return turbotax More than one qualified business use. How to amend 2011 tax return turbotax   If you conduct more than one business that qualifies for this deduction in your home, your election to use the simplified method applies to all your qualified business uses of that home. How to amend 2011 tax return turbotax More than one home. How to amend 2011 tax return turbotax   If you used more than one home during the year (for example, you moved during the year), you can elect to use the simplified method for only one of the homes. How to amend 2011 tax return turbotax You must figure the deduction for any other home using actual expenses. How to amend 2011 tax return turbotax Simplified Amount Your deduction for the qualified business use of a home is the sum of each amount you figure for a separate qualified business use of your home. How to amend 2011 tax return turbotax To figure your deduction for the business use of a home using the simplified method, you will need to know the following information for each qualified business use of the home. How to amend 2011 tax return turbotax The allowable area of your home used in conducting the business. How to amend 2011 tax return turbotax If you did not conduct the business for the entire year in the home or the area changed during the year, you will need to know the allowable area you used and the number of days you conducted the business for each month. How to amend 2011 tax return turbotax The gross income from the business use of your home. How to amend 2011 tax return turbotax The amount of the business expenses that are not related to the use of your home. How to amend 2011 tax return turbotax If the qualified business use is for a daycare facility that uses space in your home on a regular (but not exclusive) basis, you will also need to know the percentage of time that part of your home is used for daycare. How to amend 2011 tax return turbotax To figure the amount you can deduct for qualified business use of your home using the simplified method, follow these 3 steps. How to amend 2011 tax return turbotax Multiply the allowable area by $5 (or less than $5 if the qualified business use is for a daycare that uses space in your home on a regular, but not exclusive, basis). How to amend 2011 tax return turbotax See Allowable area and Space used regularly for daycare , later. How to amend 2011 tax return turbotax Subtract the expenses from the business that are not related to the use of the home from the gross income related to the business use of the home. How to amend 2011 tax return turbotax If these expenses are greater than the gross income from the business use of the home, then you cannot take a deduction for this business use of the home. How to amend 2011 tax return turbotax See Gross income limitation , later. How to amend 2011 tax return turbotax Take the smaller of the amounts from (1) and (2). How to amend 2011 tax return turbotax This is the amount you can deduct for this qualified business use of your home using the simplified method. How to amend 2011 tax return turbotax If you are an employee or a partner, or you use your home in your farming business and file Schedule F (Form 1040), you can use the Simplified Method Worksheet, near the end of this publication, to help you figure your deduction. How to amend 2011 tax return turbotax If you use your home in a trade or business and you file Schedule C (Form 1040), you will use the Simplified Method Worksheet in your Instructions for Schedule C to figure your deduction. How to amend 2011 tax return turbotax Allowable area. How to amend 2011 tax return turbotax   In most cases, the allowable area is the smaller of the actual area (in square feet) of your home used in conducting the business and 300 square feet. How to amend 2011 tax return turbotax Your allowable area may be smaller if you conducted the business as a qualified joint venture with your spouse, the area used by the business was shared with another qualified business use, you used the home for the business for only part of the year, or the area used by the business changed during the year. How to amend 2011 tax return turbotax You can use the Area Adjustment Worksheet (for simplified method), near the end of this publication, to help you figure your allowable area for a qualified business use. How to amend 2011 tax return turbotax Area used by a qualified joint venture. How to amend 2011 tax return turbotax   If the qualified business use of the home is also a qualified joint venture, you and your spouse will figure the deduction for the business use separately. How to amend 2011 tax return turbotax Split the actual area used in conducting business between you and your spouse in the same manner you split your other tax attributes. How to amend 2011 tax return turbotax Then, each spouse will figure the allowable area separately. How to amend 2011 tax return turbotax For more information about qualified joint ventures, see Qualified Joint Venture in the Instructions for Schedule C. How to amend 2011 tax return turbotax Shared use. How to amend 2011 tax return turbotax   If you share your home with someone else who uses the home to conduct business that also qualifies for this deduction, you may not include the same square feet to figure your deduction as the other person. How to amend 2011 tax return turbotax You must allocate the shared space between you and the other person in a reasonable manner. How to amend 2011 tax return turbotax Example. How to amend 2011 tax return turbotax Kristin and Lindsey are roommates. How to amend 2011 tax return turbotax Kristin uses 300 square feet of their home for a qualified business use. How to amend 2011 tax return turbotax Lindsey uses 200 square feet of their home for a separate qualified business use. How to amend 2011 tax return turbotax The qualified business uses share 100 square feet. How to amend 2011 tax return turbotax In addition to the portion that they do not share, Kristin and Lindsey can both claim 50 of the 100 square feet or divide the 100 square feet between them in any reasonable manner. How to amend 2011 tax return turbotax If divided evenly, Kristin could claim 250 square feet using the simplified method and Lindsey could claim 150 square feet. How to amend 2011 tax return turbotax More than one qualified business use. How to amend 2011 tax return turbotax   If you conduct more than one business qualifying for the deduction, you are limited to a maximum of 300 square feet for all of the businesses. How to amend 2011 tax return turbotax Allocate the actual square footage used (up to the maximum of 300 square feet) among your qualified business uses in a reasonable manner. How to amend 2011 tax return turbotax However, do not allocate more square feet to a qualified business use than you actually use for that business. How to amend 2011 tax return turbotax Rental use. How to amend 2011 tax return turbotax   The simplified method does not apply to rental use. How to amend 2011 tax return turbotax A rental use that qualifies for the deduction must be figured using actual expenses. How to amend 2011 tax return turbotax If the rental use and a qualified business use share the same area, you will have to allocate the actual area used between the two uses. How to amend 2011 tax return turbotax You cannot use the same area to figure a deduction for the qualified business use as you are using to figure the deduction for the rental use. How to amend 2011 tax return turbotax Part-year use or area changes. How to amend 2011 tax return turbotax   If your qualified business use was for a portion of the taxable year (for example, a seasonal business or a business that begins during the taxable year) or you changed the square footage of your qualified business use, your deduction is limited to the average monthly allowable square footage. How to amend 2011 tax return turbotax You calculate the average monthly allowable square footage by adding the amount of allowable square feet you used in each month and dividing the sum by 12. How to amend 2011 tax return turbotax When determining the average monthly allowable square footage, you cannot take more than 300 square feet into account for any one month. How to amend 2011 tax return turbotax Additionally, if your qualified business use was less than 15 days in a month, you must use -0- for that month. How to amend 2011 tax return turbotax Example 1. How to amend 2011 tax return turbotax Andy files his federal income tax return on a calendar year basis. How to amend 2011 tax return turbotax On July 20, he began using 420 square feet of his home for a qualified business use. How to amend 2011 tax return turbotax He continued to use the 420 square feet until the end of the year. How to amend 2011 tax return turbotax His average monthly allowable square footage is 125 square feet, which is figured using 300 square feet for each month August through December divided by the number of months in the taxable year ((0 + 0 + 0 + 0 + 0 + 0 + 0 + 300 + 300 + 300 + 300 + 300)/12). How to amend 2011 tax return turbotax Example 2. How to amend 2011 tax return turbotax Amy files her federal income tax return on a calendar year basis. How to amend 2011 tax return turbotax On April 20, she began using 100 square feet of her home for a qualified business use. How to amend 2011 tax return turbotax On August 5, she expanded the area of her qualified use to 330 square feet. How to amend 2011 tax return turbotax Amy continued to use the 330 square feet until the end of the year. How to amend 2011 tax return turbotax Her average monthly allowable square footage is 150 square feet, which is figured using 100 square feet for May through July and 300 square feet for August through December divided by the number of months in the taxable year ((0 + 0 + 0 + 0 + 100 + 100 +100 + 300 + 300 + 300 + 300 + 300)/12). How to amend 2011 tax return turbotax Gross income limitation. How to amend 2011 tax return turbotax   Your deduction for business use of the home is limited to an amount equal to the gross income derived from the qualified business use of the home reduced by the business deductions that are unrelated to the use of your home. How to amend 2011 tax return turbotax If the business deductions that are unrelated to the use of your home are greater than the gross income derived from the qualified business use of your home, then you cannot take a deduction for this qualified business use of your home. How to amend 2011 tax return turbotax Business expenses not related to use of the home. How to amend 2011 tax return turbotax   These expenses relate to the business activity in the home, but not to the use of the home itself. How to amend 2011 tax return turbotax You can still deduct business expenses that are unrelated to the use of the home. How to amend 2011 tax return turbotax See Where To Deduct , later. How to amend 2011 tax return turbotax Examples of business expenses that are unrelated to the use of the home are advertising, wages, supplies, dues, and depreciation for equipment. How to amend 2011 tax return turbotax Space used regularly for daycare. How to amend 2011 tax return turbotax   If you do not use the area of your home exclusively for daycare, you must reduce the prescribed rate (maximum $5 per square foot) before figuring your deduction. How to amend 2011 tax return turbotax The reduced rate will equal the prescribed rate times a fraction. How to amend 2011 tax return turbotax The numerator of the fraction is the number of hours that the space was used during the year for daycare and the denominator is the total number of hours during the year that the space was available for all uses. How to amend 2011 tax return turbotax You can use the Daycare Facility Worksheet (for simplified method), near the end of this publication, to help you figure the reduced rate. How to amend 2011 tax return turbotax    If you used at least 300 square feet for daycare regularly and exclusively during the year, then you do not need to reduce the prescribed rate or complete the Daycare Facility Worksheet. How to amend 2011 tax return turbotax Daycare Facility If you use space in your home on a regular basis for providing daycare, you may be able to claim a deduction for that part of your home even if you use the same space for nonbusiness purposes. How to amend 2011 tax return turbotax To qualify for this exception to the exclusive use rule, you must meet both of the following requirements. How to amend 2011 tax return turbotax You must be in the trade or business of providing daycare for children, persons age 65 or older, or persons who are physically or mentally unable to care for themselves. How to amend 2011 tax return turbotax You must have applied for, been granted, or be exempt from having, a license, certification, registration, or approval as a daycare center or as a family or group daycare home under state law. How to amend 2011 tax return turbotax You do not meet this requirement if your application was rejected or your license or other authorization was revoked. How to amend 2011 tax return turbotax Figuring the deduction. How to amend 2011 tax return turbotax   If you elect to use the simplified method for your home, figure your deduction as described earlier in Using the Simplified Method under Figuring the Deduction. How to amend 2011 tax return turbotax    If you are figuring your deduction using actual expenses and you regularly use part of your home for daycare, figure what part is used for daycare, as explained in Business Percentage , earlier, under Figuring the Deduction. How to amend 2011 tax return turbotax If you also use that part exclusively for daycare, deduct all the allocable expenses, subject to the deduction limit, as explained earlier. How to amend 2011 tax return turbotax   If the use of part of your home as a daycare facility is regular, but not exclusive, you must figure the percentage of time that part of your home is used for daycare. How to amend 2011 tax return turbotax A room that is available for use throughout each business day and that you regularly use in your business is considered to be used for daycare throughout each business day. How to amend 2011 tax return turbotax You do not have to keep records to show the specific hours the area was used for business. How to amend 2011 tax return turbotax You can use the area occasionally for personal reasons. How to amend 2011 tax return turbotax However, a room you use only occasionally for business does not qualify for the deduction. How to amend 2011 tax return turbotax To find the percentage of time you actually use your home for business, compare the total time used for business to the total time that part of your home can be used for all purposes. How to amend 2011 tax return turbotax You can compare the hours of business use in a week with the number of hours in a week (168). How to amend 2011 tax return turbotax Or you can compare the hours of business use for the year with the number of hours in the year (8,760 in 2013). How to amend 2011 tax return turbotax If you started or stopped using your home for daycare in 2013, you must prorate the number of hours based on the number of days the home was available for daycare. How to amend 2011 tax return turbotax Example 1. How to amend 2011 tax return turbotax Mary Lake used her basement to operate a daycare business for children. How to amend 2011 tax return turbotax She figures the business percentage of the basement as follows. How to amend 2011 tax return turbotax Square footage of the basement Square footage of her home = 1,600 3,200 = 50%           She used the basement for daycare an average of 12 hours a day, 5 days a week, for 50 weeks a year. How to amend 2011 tax return turbotax During the other 12 hours a day, the family could use the basement. How to amend 2011 tax return turbotax She figures the percentage of time the basement was used for daycare as follows. How to amend 2011 tax return turbotax Number of hours used for daycare (12 x 5 x 50) Total number of hours in the year (24 x 365) = 3,000 8,760 = 34. How to amend 2011 tax return turbotax 25%           Mary can deduct 34. How to amend 2011 tax return turbotax 25% of any direct expenses for the basement. How to amend 2011 tax return turbotax However, because her indirect expenses are for the entire house, she can deduct only 17. How to amend 2011 tax return turbotax 13% of the indirect expenses. How to amend 2011 tax return turbotax She figures the percentage for her indirect expenses as follows. How to amend 2011 tax return turbotax Business percentage of the basement 50% Multiplied by: Percentage of time used for daycare × 34. How to amend 2011 tax return turbotax 25% Percentage for indirect expenses 17. How to amend 2011 tax return turbotax 13% Mary completes Form 8829, Part I, figuring the percentage of her home used for business, including the percentage of time the basement was used. How to amend 2011 tax return turbotax In Part II, Mary figures her deductible expenses. How to amend 2011 tax return turbotax She uses the following information to complete Part II. How to amend 2011 tax return turbotax Gross income from her daycare business $50,000 Expenses not related to the business use of the home $25,000 Tentative profit $25,000 Rent $8,400 Utilities $850 Painting the basement $500 Mary enters her tentative profit, $25,000, on line 8. How to amend 2011 tax return turbotax (This figure is the same as the amount on line 29 of her Schedule C (Form 1040). How to amend 2011 tax return turbotax ) The expenses she paid for rent and utilities relate to her entire home. How to amend 2011 tax return turbotax Therefore, she enters the amount paid for rent on line 18, column (b), and the amount paid for utilities on line 20, column (b). How to amend 2011 tax return turbotax She shows the total of these expenses on line 22, column (b). How to amend 2011 tax return turbotax For line 23, she multiplies the amount on line 22, column (b) by the percentage on line 7 and enters the result, $1,585. How to amend 2011 tax return turbotax Mary paid $500 to have the basement painted. How to amend 2011 tax return turbotax The painting is a direct expense. How to amend 2011 tax return turbotax However, because she did not use the basement exclusively for daycare, she must multiply $500 by the percentage of time the basement was used for daycare (34. How to amend 2011 tax return turbotax 25% – line 6). How to amend 2011 tax return turbotax She enters $171 (34. How to amend 2011 tax return turbotax 25% × $500) on line 19, column (a). How to amend 2011 tax return turbotax She adds line 22, column (a), and line 23 and enters $1,756 ($171 + $1,585) on line 25. How to amend 2011 tax return turbotax This is less than her deduction limit (line 15), so she can deduct the entire amount. How to amend 2011 tax return turbotax She follows the instructions to complete the rest of Part II and enters $1,756 on lines 33 and 35. How to amend 2011 tax return turbotax She then carries the $1,756 to line 30 of her Schedule C (Form 1040). How to amend 2011 tax return turbotax Example 2. How to amend 2011 tax return turbotax Assume the same facts as in Example 1 except that Mary also has another room that was available each business day for children to take naps in. How to amend 2011 tax return turbotax Although she did not keep a record of the number of hours the room was actually used for naps, it was used for part of each business day. How to amend 2011 tax return turbotax Since the room was available for business use during regular operating hours each business day and was used regularly in the business, it is considered used for daycare throughout each business day. How to amend 2011 tax return turbotax The basement and room are 60% of the total area of her home. How to amend 2011 tax return turbotax In figuring her expenses, 34. How to amend 2011 tax return turbotax 25% of any direct expenses for the basement and room are deductible. How to amend 2011 tax return turbotax In addition, 20. How to amend 2011 tax return turbotax 55% (34. How to amend 2011 tax return turbotax 25% × 60%) of her indirect expenses are deductible. How to amend 2011 tax return turbotax Example 3. How to amend 2011 tax return turbotax Assume the same facts as in Example 1 except that Mary stopped using her home for a daycare facility on June 24, 2013. How to amend 2011 tax return turbotax She used the basement for daycare an average of 12 hours a day, 5 days a week, but for only 25 weeks of the year. How to amend 2011 tax return turbotax During the other 12 hours a day, the family could still use the basement. How to amend 2011 tax return turbotax She figures the percentage of time the basement was used for business as follows. How to amend 2011 tax return turbotax Number of hours used for daycare (12 x 5 x 25) Total number of hours during period used (24 x 175) = 1,500 4,200 = 35. How to amend 2011 tax return turbotax 71%           Mary can deduct 35. How to amend 2011 tax return turbotax 71% of any direct expenses for the basement. How to amend 2011 tax return turbotax However, because her indirect expenses are for the entire house, she can deduct only 17. How to amend 2011 tax return turbotax 86% of the indirect expenses. How to amend 2011 tax return turbotax She figures the percentage for her indirect expenses as follows. How to amend 2011 tax return turbotax Business percentage of the basement 50% Multiplied by: Percentage of time used for daycare × 35. How to amend 2011 tax return turbotax 71% Percentage for indirect expenses 17. How to amend 2011 tax return turbotax 86% Meals. How to amend 2011 tax return turbotax   If you provide food for your daycare recipients, do not include the expense as a cost of using your home for business. How to amend 2011 tax return turbotax Claim it as a separate deduction on your Schedule C (Form 1040). How to amend 2011 tax return turbotax You can never deduct the cost of food consumed by you or your family. How to amend 2011 tax return turbotax You can deduct as a business expense 100% of the actual cost of food consumed by your daycare recipients (see Standard meal and snack rates , later, for an optional method for eligible children) and generally only 50% of the cost of food consumed by your employees. How to amend 2011 tax return turbotax However, you can deduct 100% of the cost of food consumed by your employees if its value can be excluded from their wages as a de minimis fringe benefit. How to amend 2011 tax return turbotax For more information on meals that meet these requirements, see Meals in chapter 2 of Publication 15-B, Employer's Tax Guide to Fringe Benefits. How to amend 2011 tax return turbotax   If you deduct the actual cost of food for your daycare business, keep a separate record (with receipts) of your family's food costs. How to amend 2011 tax return turbotax   Reimbursements you receive from a sponsor under the Child and Adult Care Food Program of the Department of Agriculture are taxable only to the extent they exceed your expenses for food for eligible children. How to amend 2011 tax return turbotax If your reimbursements are more than your expenses for food, show the difference as income in Part I of Schedule C (Form 1040). How to amend 2011 tax return turbotax If your food expenses are greater than the reimbursements, show the difference as an expense in Part V of Schedule C (Form 1040). How to amend 2011 tax return turbotax Do not include payments or expenses for your own children if they are eligible for the program. How to amend 2011 tax return turbotax Follow this procedure even if you receive a Form 1099-MISC, Miscellaneous Income, reporting a payment from the sponsor. How to amend 2011 tax return turbotax Standard meal and snack rates. How to amend 2011 tax return turbotax   If you qualify as a family daycare provider, you can use the standard meal and snack rates, instead of actual costs, to compute the deductible cost of meals and snacks provided to eligible children. How to amend 2011 tax return turbotax For these purposes: A family daycare provider is a person engaged in the business of providing family daycare. How to amend 2011 tax return turbotax Family daycare is childcare provided to eligible children in the home of the family daycare provider. How to amend 2011 tax return turbotax The care must be non-medical, not involve a transfer of legal custody, and generally last less than 24 hours each day. How to amend 2011 tax return turbotax Eligible children are minor children receiving family daycare in the home of the family daycare provider. How to amend 2011 tax return turbotax Eligible children do not include children who are full-time or part-time residents in the home where the childcare is provided or children whose parents or guardians are residents of the same home. How to amend 2011 tax return turbotax Eligible children do not include children who receive daycare services for personal reasons of the provider. How to amend 2011 tax return turbotax For example, if a provider provides daycare services for a relative as a favor to that relative, that child is not an eligible child. How to amend 2011 tax return turbotax   You can compute the deductible cost of each meal and snack you actually purchased and served to an eligible child during the time period you provided family daycare using the standard meal and snack rates shown in Table 3, later. How to amend 2011 tax return turbotax You can use the standard meal and snack rates for a maximum of one breakfast, one lunch, one dinner, and three snacks per eligible child per day. How to amend 2011 tax return turbotax If you receive reimbursement for a particular meal or snack, you can deduct only the portion of the applicable standard meal or snack rate that is more than the amount of the reimbursement. How to amend 2011 tax return turbotax   You can use either the standard meal and snack rates or actual costs to calculate the deductible cost of food provided to eligible children in the family daycare for any particular tax year. How to amend 2011 tax return turbotax If you choose to use the standard meal and snack rates for a particular tax year, you must use the rates for all your deductible food costs for eligible children during that tax year. How to amend 2011 tax return turbotax However, if you use the standard meal and snack rates in any tax year, you can use actual costs to compute the deductible cost of food in any other tax year. How to amend 2011 tax return turbotax   If you use the standard meal and snack rates, you must maintain records to substantiate the computation of the total amount deducted for the cost of food provided to eligible children. How to amend 2011 tax return turbotax The records kept should include the name of each child, dates and hours of attendance in the daycare, and the type and quantity of meals and snacks served. How to amend 2011 tax return turbotax This information can be recorded in a log similar to the one shown in Exhibit A, near the end of this publication. How to amend 2011 tax return turbotax   The standard meal and snack rates include beverages, but do not include non-food supplies used for food preparation, service, or storage, such as containers, paper products, or utensils. How to amend 2011 tax return turbotax These expenses can be claimed as a separate deduction on your Schedule C (Form 1040). How to amend 2011 tax return turbotax     Table 3. How to amend 2011 tax return turbotax Standard Meal and Snack Rates1 Location of Family Daycare Provider Breakfast Lunch Dinner Snack States other than Alaska an