Is TurboTax 2020 still allowing home office deduction for W2 employees? Confused about eligibility

Thanks for confirming I'm not going crazy! I went back and checked how I entered her employment info, and you're absolutely right. Somehow when I entered her W2, I also checked a box saying she had "additional self-employment income" which was from a tiny side gig she did for her friend's business a few years ago but NOT in 2024. So TurboTax was calculating home office for that nonexistent self-employment income! But now I'm worried - does this mean we've been incorrectly claiming this deduction since 2018? Should I file amended returns for those years?

You're definitely not going crazy! This is a common misunderstanding since the tax law change was significant. As for amending prior returns, you generally have up to three years from the original filing deadline to amend a return, so 2022 and 2023 could still be amended if needed. However, I'd recommend first reviewing those past returns carefully to confirm if the same error occurred. It's possible that in previous years your wife might have legitimately had some self-employment income that justified the deduction. The IRS typically has a three-year window to audit returns, so returns from 2021 and earlier may be outside that window anyway.

How accurate is taxr.ai though? I've been burned by tax software before claiming it could catch everything. Does it actually review your full return or just do some basic checks? I've got a similar situation with potential home office deduction issues from previous years.

I'm skeptical about using yet another tax tool when TurboTax already messed things up. Do you have to give it access to all your personal financial info? Not sure I'm comfortable with that. Does it actually connect to the IRS database to check if you've made mistakes?

It's surprisingly accurate - it uses the same rules and checks that professional tax reviewers use. It goes through your full return line by line, not just basic checks. The analysis found several other small issues I had no idea about, including some credits I was eligible for but missed. Regarding privacy concerns, it uses bank-level encryption and you can actually choose to blur out personal details like SSN and just have it focus on the tax calculations and structure. It doesn't connect to the IRS database - it's analyzing the tax return itself against current tax rules and regulations. You're essentially getting the same review a tax professional would give you but automated.

How does this actually work? Do they have some special access to the IRS or something? I've literally waited on hold for 3+ hours multiple times trying to ask about my incorrectly filed home office deduction.

This sounds too good to be true. I've been trying to reach the IRS for WEEKS about my home office deduction mess-up. Are you sure this isn't just them calling and waiting on hold for you? And are there hidden fees? I'm desperate but skeptical.

They use a specialized system that navigates the IRS phone tree and waits on hold for you. Once they reach an agent, you get a call to connect with them. It's like having someone wait in line for you. There's a flat fee - no hidden costs. I was skeptical too, but when I got connected to an actual IRS agent so quickly after weeks of failed attempts, it was worth every penny. The agent I spoke with gave me specific guidance about my home office deduction situation that saved me from filing unnecessary amendments for years that were too old to worry about.

This is super helpful! I just checked my draft 2024 return and found Schedule C was there even though I'm purely W2. When I dug deeper, turns out I had checked a box about "online selling" because I sold some old furniture on Facebook Marketplace. TurboTax was treating that as self-employment and letting me allocate home office space to that "business." Would this tiny amount of selling stuff online actually qualify for home office?

For casual selling of personal items like furniture on Facebook Marketplace, that's typically not considered self-employment and wouldn't qualify for home office deduction. The IRS generally views that as selling personal items at a loss (since you're selling used items for less than you paid). For a home office deduction to be valid for self-employment, you need regular and exclusive use of the space for business purposes, and the activity needs to have a profit motive with regular, ongoing activity. Occasional selling of personal items doesn't meet those criteria. You should uncheck that box if you're not actually running a business with intent to make profit.

Same thing happened to me! The home office change affected my total itemized deductions which made them less than the standard deduction, so TurboTax switched me to standard. But then that made some of my state deductions invalid. It was a whole domino effect. Ended up owing about $2450 more than my original calculation.