Step-by-Step Guide
Click the + icon to add Form 8829 (Expenses for Business Use of Your Home) to the tax return.
Next, click + next to the Schedule C that the Form 8829 relates to.
Enter the square footage of the area used exclusively for business, along with the total square footage of the home, in the designated fields.
The software will automatically calculate the percentage of expenses that are considered deductible based on the square footage entered.
Next, enter the copy number that the Form 8829 relates to. This corresponds to the Schedule C it is linked to:
* If there is only one Schedule C on the return, enter 1.
* If it applies to the second Schedule C, enter 2, and so on.
Enter expenses in the correct column, generally the indirect column:
* Direct Expenses: 100% business-related (e.g., office repairs, business-only utilities).
* Indirect Expenses: Shared costs (e.g., home electricity, internet).
The software applies the business-use percentage.
Example shown here.
By correctly using Form 8829 in TaxWise, you help the taxpayer claim the home office deduction, lowering their taxable income and ensuring proper compliance with IRS guidelines for business use of the home. ๐
You can also view the tutorial here: