Schedule C Home Office Deduction clarification - Line 30 vs Part 2 expenses

I'm getting really confused about how to properly report my home office expenses on Schedule C. If I'm taking the home office business deduction on line 30 of Schedule C, does that mean I can't deduct ANY home business expenses in Part 2? Like, am I not supposed to report any portion of my mortgage payments that go toward my home office, or utilities allocated to the home office, etc. in Part 2? Or are all those mortgage/utility deductions in Part 2 only for if you have a completely separate office building that's not in your house? I've been working from home full-time for my business and want to make sure I'm not double-dipping on deductions but also not missing out on legitimate write-offs!

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25 comments

Nia Davis

•8M

The home office deduction on line 30 is actually a simplified method that replaces itemizing those specific expenses in Part 2. You're right to be cautious about double-dipping! If you choose to take the simplified deduction on line 30 (which is calculated at $5 per square foot up to 300 square feet), then you cannot also claim mortgage interest, utilities, insurance, etc. for that same space in Part 2. That would indeed be double-counting the same expenses. However, if you have business expenses that aren't related to the home office space itself, those still go in Part 2. For example, office supplies, business equipment, professional services, etc. would still be deductible in the appropriate categories in Part 2.

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Nia Davis

•8M

Internet service is generally considered a utility for the home office space, so if you're using the simplified method on line 30, you shouldn't also claim internet expenses separately in Part 2. The simplified deduction is meant to cover all those normal costs associated with maintaining the office space. If you use the internet for both business and personal purposes, and you're using the regular method (not the simplified one on line 30), you could deduct the business portion of your internet costs in Part 2. But if you go with the simplified method, the $5 per square foot is supposed to cover utilities including internet service.

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QuantumQueen

•8M

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QuantumQueen

•8M

It definitely explains the reasoning behind each recommendation. For example, it specifically told me that the simplified method on line 30 is designed to replace itemizing home-related expenses, and it explained which expenses are covered by that method versus which ones still need to be reported separately in Part 2. It's like having a tax professional explain things in plain English. As for reliability, I've found it to be extremely accurate. It bases its analysis on official IRS guidelines, but explains them in a way that's much easier to understand. Many tax preparers use similar software anyway, but this gives you direct access without the hourly fees. That said, for really complex situations, having both this tool and a professional review might give you the best peace of mind.

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Ethan Wilson

•8M

I wanted to follow up after trying https://taxr.ai that was mentioned earlier. I was skeptical but gave it a shot, and wow - it actually clarified my entire Schedule C situation! It analyzed my draft tax return and immediately pointed out that I was claiming both the simplified home office deduction AND portions of my mortgage and utilities in Part 2. The explanation was crystal clear about how the simplified method is meant to replace those individual expense items. The tool even showed me a comparison of what I'd save using each method based on my specific situation. In my case, itemizing in Part 2 was actually better than the simplified method, which I wouldn't have realized. Definitely saved me from making a mistake that could have triggered an audit!

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•8M

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•8M

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Carmen Flores

•8M

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Fatima Al-Rashid

•5M

This is such a common source of confusion! I went through the exact same thing last year. The key thing to remember is that the simplified method on line 30 is meant to be an "either/or" choice - you either take the simplified deduction OR you itemize the actual expenses in Part 2, but never both. If you choose the simplified method ($5 per square foot up to 300 sq ft), it's supposed to cover ALL the costs associated with maintaining that office space - utilities, mortgage interest, property taxes, insurance, repairs, etc. So you can't also claim those same expenses in Part 2. However, you can still deduct business expenses that aren't related to the physical office space itself in Part 2 - things like business phone lines, office supplies, equipment, software subscriptions, professional services, etc. One tip: calculate both methods before deciding. The simplified method is easier but not always better financially. If you have high home costs or a large office space (over 300 sq ft), itemizing might give you a bigger deduction.

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Dmitry Smirnov

•4M

This is really helpful! I'm new to running a business from home and was getting overwhelmed trying to figure out which expenses go where. Your explanation about it being an "either/or" choice makes so much sense - I was definitely overthinking it. Quick follow-up question: when you say "business phone lines" can still be deducted in Part 2 even with the simplified method, does that include cell phone bills if I use my personal phone for business calls? Or would that fall under the office space costs since I'm using it in my home office?

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Gabriel Ruiz

•4M

Great question about the cell phone! If you use your personal cell phone for business purposes, you can typically deduct the business percentage of your cell phone bill in Part 2, even when using the simplified home office method on line 30. The cell phone isn't really tied to the physical office space itself - it's more of a business communication tool that you'd need regardless of where your office is located. Just make sure you can reasonably determine what percentage of your cell phone use is for business vs. personal. Some people keep detailed logs, while others use a reasonable estimate based on their usage patterns. The key is being able to justify your percentage if the IRS ever asks. This is different from something like your home internet service, which is more directly tied to operating your home office space and would be covered under the simplified method.

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Victoria Jones

•4M

Something that helped me understand this better was thinking about it like this: the simplified method on line 30 is basically the IRS saying "we know home offices have certain standard costs, so here's a flat rate that covers all the typical stuff." When you take that $5 per square foot deduction, you're essentially telling the IRS "I'm using your standard allowance for all my home office space costs" - which includes utilities, a portion of mortgage/rent, insurance, repairs, etc. That's why you can't then turn around and also claim those same types of expenses in Part 2. But here's what I found really important to track separately: any business expense that you'd have regardless of WHERE your office is located. Computer equipment, business software, office furniture, professional memberships, business insurance - these aren't "home office space" costs, they're just regular business expenses that happen to be used in your home office. The confusion often comes from thinking the simplified method means you can't deduct anything else business-related, but that's not true. It just means you can't double-dip on the costs of maintaining the physical space itself.

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Luca Russo

•2M

This is such a helpful way to think about it! I've been struggling with this exact distinction and your explanation about "costs you'd have regardless of WHERE your office is located" really clarifies things for me. I think where I was getting confused is that I kept thinking of my computer and desk as "home office" expenses, but you're right - I'd need those business tools whether I worked from home, rented an office space, or worked anywhere else. The simplified method is just covering the "housing" costs of that equipment, not the equipment itself. This makes me feel much more confident about which expenses I can still legitimately claim in Part 2. Thanks for breaking it down in such a practical way!

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Aileen Rodriguez

•2M

I went through this exact confusion when I first started my home-based consulting business! What really helped me was creating a simple mental checklist: **If I choose the simplified method (line 30), I CANNOT also claim:** - Any portion of mortgage interest for the office space - Property taxes allocated to the office - Utilities (electric, gas, water) for the office area - Home insurance allocated to the office - Repairs and maintenance for the office space **But I CAN still claim in Part 2:** - Office supplies and materials - Business equipment and software - Professional licenses and subscriptions - Business meals and travel - Marketing and advertising costs - Professional services (legal, accounting, etc.) The way I remember it: the simplified method covers the "housing" of my business, but not the actual business operations. It took me a couple years to get comfortable with this distinction, but once it clicked, filing became so much easier! One last tip: I always run the calculation both ways in a spreadsheet before deciding. Sometimes the math surprises you, especially if you have high utility costs or a larger office space.

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Keisha Johnson

•9d

This checklist is incredibly helpful! I'm just starting out with my home business and was completely overwhelmed by all the different deduction categories. Your breakdown of what's covered by the simplified method versus what still goes in Part 2 makes it so much clearer. I especially appreciate the tip about running the calculation both ways - I hadn't even thought about comparing the methods numerically. Do you happen to know if there are any good spreadsheet templates out there for doing this comparison? I'm pretty comfortable with Excel but don't want to reinvent the wheel if there's already a good template available. Also, when you mention "professional services" can still be claimed in Part 2, does that include things like my accountant's fee for preparing my taxes, or business coaching services? I want to make sure I'm not missing any legitimate deductions while also staying on the right side of the rules.

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