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June 6, 2019
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Is it better to claim a home office as a business expense when self-employed or as a personal deduction?

  • June 6, 2019
  • 2 replies
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Best answer by ChristinaS

If you are debating between receiving a home office deduction on your business' Schedule C or skipping that and applying everything to Schedule A.... the answer is almost always Schedule C.

If your business has a healthy profit, the home office deduction can reduce your net income. Reducing your net income reduces your AGI, and also reduces your Self-Employment tax.

Putting everything on Schedule A doesn't reduce your Self-Employment tax or your AGI. As such, you will pay more income taxes 99% of the time by skipping an available home office deduction on your Schedule C.

The amount of the home office expenses which are not deducted on the Schedule C automatically flow to Schedule A.

2 replies

Employee
June 6, 2019
what do you mean "or as a deduction?"
Employee
June 6, 2019

If you are debating between receiving a home office deduction on your business' Schedule C or skipping that and applying everything to Schedule A.... the answer is almost always Schedule C.

If your business has a healthy profit, the home office deduction can reduce your net income. Reducing your net income reduces your AGI, and also reduces your Self-Employment tax.

Putting everything on Schedule A doesn't reduce your Self-Employment tax or your AGI. As such, you will pay more income taxes 99% of the time by skipping an available home office deduction on your Schedule C.

The amount of the home office expenses which are not deducted on the Schedule C automatically flow to Schedule A.