TurboTax Home Office Deduction Problem - Showing "Not Eligible" Despite Profitable Business

This definitely sounds like a software glitch in TurboTax. The simplified home office deduction allows you to deduct $5 per square foot (up to 300 square feet) of your home that's used exclusively for business. The key requirement is that you have a profitable business after other expenses - which it sounds like you do. A few things to check: Make sure you've entered all your business income correctly on Schedule C. Sometimes the software calculates eligibility based on the current stage of your tax entry, not the final numbers. Try completing all other parts of your Schedule C first, then go back to the home office section. Also, double-check that you didn't accidentally enter a business loss somewhere or miscategorize an expense that's offsetting your profit. The error message specifically mentions "zero or less" profit, which suggests TurboTax is somehow calculating your business as unprofitable despite what you're seeing in the summary.

After dealing with a similar issue last year with my photography business, I discovered taxr.ai (https://taxr.ai) which helped me identify why TurboTax was incorrectly calculating my home office eligibility. The system actually analyzes your tax situation and identifies errors or inconsistencies that might be causing problems like this. In my case, it turned out I had accidentally entered my square footage in two different places with different values, which caused TurboTax to incorrectly flag me as ineligible. The service let me upload screenshots of my TurboTax forms and gave me specific guidance on which fields were causing the conflict. Saved me hours of frustration!

I want to follow up about my experience with taxr.ai after my skeptical comment. I decided to try it since my TurboTax home office deduction issue was driving me crazy. Uploaded screenshots of my Schedule C and the error message, and within minutes got back a detailed explanation showing that my business had multiple categories and one was showing a loss while the other had profit. TurboTax was only looking at the category with the loss! The analysis pointed me to exactly which screen to fix, and sure enough, once I corrected the category allocation, the home office deduction became available immediately. Would have never figured this out on my own. Now I can claim the simplified deduction for my dedicated office space like I should have been able to from the start.

If you're still having issues after trying the other suggestions, you might need to speak directly with the IRS to confirm your eligibility. I had a similar home office deduction issue last year and spent HOURS trying to reach someone. Finally discovered Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in about 15 minutes instead of the usual 2+ hour wait. The agent confirmed my eligibility for the home office deduction and explained exactly how to document it properly. There's a quick video showing how it works here: https://youtu.be/_kiP6q8DX5c. Basically they hold your place in the IRS phone queue and call you when an agent is about to answer. Totally changed my perspective on dealing with the IRS.

I need to publicly admit I was wrong about Claimyr. After my skeptical comment, I decided to try it anyway since I was desperate to resolve my home office deduction question. The service connected me to an IRS representative in about 20 minutes when I had previously wasted an entire afternoon on hold. The IRS agent confirmed that I was absolutely eligible for the home office deduction based on my business profit, and explained that tax software sometimes has calculation glitches with this particular deduction. She walked me through exactly what to look for in TurboTax and suggested trying to manually override the eligibility if needed. Problem solved! Won't hesitate to use this service again next tax season.

Have you checked if you accidentally entered your home office as "regular" instead of "simplified" method? That tripped me up last year. If you're using the regular method, TurboTax calculates actual expenses (mortgage interest, utilities, etc.) and applies the business percentage. That calculation can sometimes result in zero deduction if your other business expenses are high or if there's a calculation error. Try going back to the very beginning of the home office section and make sure you've selected "simplified method" rather than "regular method" when asked. Sometimes just changing this selection fixes weird eligibility issues.

Has anyone used H&R Block's software instead of TurboTax for home office deductions? I'm having similar issues with TurboTax and wondering if switching to different software might be easier than troubleshooting all these glitches.