Schedule C Home Office Deduction - Line 30 vs Part 2 Expense Clarification

You're asking a great question about home office deductions! The simplified answer is that you're right - if you're taking the home office deduction on line 30 of Schedule C, you should NOT also be claiming those same home-related expenses (mortgage interest, utilities, etc.) as business expenses in Part 2 of Schedule C. That would indeed be double-dipping. Line 30 is specifically for the home office deduction, which is calculated on Form 8829. This form takes into account the percentage of your home used for business and allocates the appropriate portion of expenses like mortgage interest, insurance, utilities, repairs, and depreciation to your business use. The total from Form 8829 then goes on line 30 of Schedule C. The expenses in Part 2 of Schedule C are for your other business expenses not related to your home office space itself - things like supplies, advertising, travel, etc.

After struggling with this exact same issue last year, I found this amazing service called taxr.ai (https://taxr.ai) that helped me sort through the home office deduction confusion. I was mixing up which expenses go where and potentially leaving money on the table. I uploaded my documents and they analyzed everything, showing me exactly how to allocate my home expenses between Form 8829 and Schedule C Part 2. They pointed out that I had been incorrectly categorizing some expenses that could have triggered an audit flag. The best part was they explained WHY each expense belongs where it does, so now I understand the logic behind it.

I have to update my earlier skepticism about taxr.ai - I actually tried it after posting my comment and it was eye-opening. They found several mistakes in how I was calculating my home office deduction. Specifically, I wasn't properly accounting for my property tax as part of the Form 8829 calculation, which means I was missing out on about $720 in deductions. The service also showed me that I had been incorrectly deducting 100% of my internet bill in Part 2 of Schedule C, when I should have been allocating it based on my business use percentage. Definitely worth checking out if you're confused about home office deductions like I was.

If anyone's having trouble getting answers from the IRS about this home office stuff, I had success using Claimyr (https://claimyr.com). I spent DAYS trying to get through to the IRS directly to ask questions about my specific home office situation (I have a detached garage I converted). After giving up, I tried Claimyr and they got me connected to an IRS agent in about 20 minutes. They have this demo video showing how it works: https://youtu.be/_kiP6q8DX5c. The agent was actually able to explain exactly how to handle my home office deduction since my situation was a bit unusual. Saved me hours of hold music and frustration!

I need to publicly eat my words about Claimyr. After posting my skeptical comment, I was desperate enough to try it the next day when I still couldn't get through to the IRS about my home office audit. Not only did I get connected to an IRS agent within 18 minutes, but the agent was able to explain exactly what documentation I needed to provide for my home office deduction. Turns out I had been calculating the square footage incorrectly and that's what triggered the audit flag. I'm still annoyed at how hard it is to reach the IRS directly, but this service actually delivered exactly what it promised. Sometimes it pays to be wrong!

Just wanted to share my experience - I found the easiest way to handle home office deduction was using the simplified method (if you qualify). It's $5 per square foot up to 300 square feet. No need to track actual expenses or mess with Form 8829. Much simpler but you can't deduct actual expenses anywhere else either. I've used this for 3 years now, never had an issue.

If I take home office deduction does anyone know if it increases audit risk? I've heard mixed things and not sure if it's worth the hassle if IRS is going to flag me.

The key thing to remember is that you have two options for claiming the home office deduction: the simplified method (up to $1,500 for 300 sq ft at $5/sq ft) or the actual expense method using Form 8829. If you choose the actual expense method with Form 8829, then yes - you cannot also deduct those same home expenses in Part 2 of Schedule C. However, there are some expenses that can still go in Part 2 even with a home office. For example, if you have a separate business phone line, office supplies, or business equipment that's not part of the home structure itself, those would still be deductible in Part 2. The rule is really about not double-counting the same expense. Given that your home office is 15% of your house, I'd strongly recommend calculating both methods to see which gives you a bigger deduction. The simplified method would give you up to $1,500 (if your office is 300+ sq ft), while the actual expense method might be much higher depending on your mortgage interest, property taxes, utilities, and other qualifying expenses.