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Any help on form 8829*Expenses for Business Use of your Home would be greatly

Posted By: appreciated ! on 2006-04-10
In Reply to:

Hi All,

I was a statutory employee last year but not now.  I usually do my own taxes but am having trouble with form 8829 and am not sure if the accountant can squeeze me in at this late date.  Thought I would try here first for help.  I use my den exclusively for work (almost) and am going to take this 7% of our home as a business expense. 

Under Part II... Lines 10 and 11.  Deductible mortgage interest and real estate taxes...I am going to take the entire amount on schedule A, so, hopefully, do not have to enter anything here. 

line 17. Insurance.  Are we allowed to take a portion of our homeowners insurance as a deduction? I have no separate business insurance. 

Line 19. Utilities.  I know I can take 7% of my electric, gas, water, garbage (I think), but what about phones? We have both cell and regular phone.  When I call, I use the regular phone for toll free numbers, but the cell phone to my boss who does not have a toll free #. 

Then, I need to find the value of my home for Part III. I guess I will check home sales in the neighborhood and go by that. 

Geez..sorry for sounding like such a dummy.  I can do all the other...capital gains, etc, just not sure what is allowed for home expenses.

As I say, I will try to get in to the accountant, but any advise for any of this form would be greatly appreciated.  I cannot complete schedule A until I have my Profit or Loss done, which I cannot complete until I do this form.


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form 8829
You said you use your den "almost" exclusively for business.  Almost doesn't count.  The room has to be used EXCLUSIVELY for business in order to be able to take business use of home.
My kids have suffered greatly from me working at home with them home. SM
I have been working at home as an MT since my two kids were born. They are now 4 and 5. In the first few years, I had no help whatsoever. Their father was a bum who didnt work or take care of them while I worked. Your children get neglected while you work basically. And babies and young children desperately need your attention while they are home with you.

My kids have so many behavioral problems right now because of their neglect. I would try to set them up with things to occupy themselves, like coloring or a movie, etc.

I finally put them in day care and things have improved, but there are still a lot of issues because of the damage that was done. They still try to seek attention by doing bad things and they dont listen to me because they are so used to me letting them get away with a lot of stuff because I was too busy typing to discipline them in their early years.

If I could do it all over again, I would definitely have put them into day care from the very beginning.

My advice would be to seek PT care for your baby. Maybe you can do some work around her schedule a little when she is home, like when she takes a nap, and then bang out a bunch of work while she is in day care.

Why not just add it to your business expenses? nm
One thing also - keep all your receipts of any business related expenses

I have a folder and everytime I buy anything related to work whether it be a pen, a printer ribbon, a book, a keyboard, etc.  I put in that folder.  Those things add up and they are all deductible which comes off of your gross.  This is in addition to the home use of your office.  A statutory IC is a great way to go because you don't have to pay the entire social security but you are still IC and can utilize the business deductions.  If you pay your own health insurance and it is in your name that is also deductible.  Keep good records...this is the most important I have learned being an IC.  Also you will probably have to file quarterly if you make over a certain amount.  If you don't you will be penalized by IRS and have to pay the penalty fee with your April 15th filing. And also remember to figure your state taxes for the year.   However it does depend on your personal situation and if you file jointly with your husband that may change things.  Good luck.

Personally I think IC is great but unless you have some really good deductions you can end up paying a lot in taxes.  If you have to pay your own social security at 15% and you were taxed at 20% rate for federal and let's say 6% for state you would be paying 41% of your income in taxes which is no fun.  But you only pay on your net income and not your gross so it sort of comes out in the wash.



as if I were working outside the home, if not more.  The only thing I would spend money on an outside job would be the $4.00 daily bus fare.  I have more than enough clothes for work, no problem there, maybe lunch or can brown-bag.  The company pays the office space, light, electricity, internet, cable, AIR CONDITIONING in summer (imp.)

On the other hand, even as an employee, I am not reimbursed for my high-speed, HIGH-COST cable/DSL/telephone I need to make these few cents a line, electric costs, lights, AC BILL JUMPS WHEN SITTING AT PC ALL DAY IN SUMMER, buy my own office supplies, books, references. 

Just another mind sc---ing they give you by telling you it's cheaper to work at home.  (I have no kids). 

I also took home office expenses as an employee, but --
You can only get any good out of it if you are also a homeowner with a lot of mortgage interest or have a lot of medical expenses, etc., that would make it higher than the standard deduction.
deducting home office expenses -
For the home office expense - You would measure the amount of space you actually use to work (your desk area) and figure the percentage of that square footage to your total square footage. Then you would use that percentage of your utilities costs, etc., to count on your taxes.
home office expenses are still deductible if you are an employee - nm
I deduct all expenses that relate to my home office-% of utilities, taxes, repairs to that room, --s
mortgage (we do not plan to sell our house so this deduction will not affect us)as my office is used only for that purpose, internet, phone, I print out a daily schedule so paper/ink, computer repairs, pens, pencils, tape, staples, file cabinets, storge bins for tax recepts/tax returns,file folders. Anything/everything I use to do my job.

I was using mileage for another account where I pick up tapes every day, but found for me the time it took to keep track of the mileage, write it down, add it up was not worth the effort so I quit doing it this year.
well not this business but home to work b/c of it.
i'm not an emotional person at all at least with work, tend to be very matter of fact. i found that working with groups of people - they were just too emotional for me to deal with. i'm much happier not having to hear the ofc rumor, politics, grind, who's mad at who, who didn't say hi today, who didn't get invited to lunch, who is upset because she should get special privies and leniency b/c she's a single parent, who didn't put in their pto requests as supposed to but gets upset b/c they can't just walk in and have their time off, and junk like that.

no putting up with that 1 person in the office who wears enough perfume for the entire staff, either.

different reasons but i'm glad i'm home instead of in that stuffy ofc anymore!
I use Quicken Home & Business.

One of the things that I like about this software is that I can keep a track of both my business and home checking accounts in the same program without having to flip back and forth. It is a little on the pricey side, but you can import the data right into Turbo Tax (if you use that program for doing your taxes) and the software cost is a tax-deductible expense.

Link below.

Quicken Home and Business.
It will do what you mention. I use it and really like it.
TurboTax Home and Business.

When transcribing "command" or "imperative" form, use verb form or "follow up"
For a long time I would become confused by "discharge instructions" type followup/follow up usage ...

Yes, the patient was to follow up with his doctor ... but was also to make a follow up appointment ...

In my experience, certainly your QA may vary and/or be inconsistent all-on-its-own ... but most of these truncated forms, fit into what I was taught was called "imperative case" and follow up is being used as a VERB ...

[[[ even though there is a reasonable argument to be made that "followup with primary care physician in 2 weeks" refers to an "appointment" which is a noun. ]]]

You can figure out the prevailing "rule of thumb" for your QA ...

Not having to think it through --- priceless.

Turbo Tax Home Business Edition! Tax Q's!!
OK, I know you probably are sick of taxes, but here I am just getting started, as usual. I always owe so much $$ that it makes me sick, and so I procrasinate. At any rate, I had used Turbo Tax Home Business for several years and it was GREAT until last year. Then they changed the program and it tanked for me, but I have high hopes that maybe this year its better and improved???  My problem is that I work for a company - that big one who shall remain nameless, and am an employee, but I always take the home office deduction -- have done so for 20 years, as my home is taken over by my office. At any rate, last year on Turbo Tax Home Business you could NOT enter your rent or mortgage or any utilities off of a W2 form - you had to be an IC. I also am a per diem IC, so I have a few hundred dollars in W9 forms.  But Turbo Tax last year would NOT let me use this home office deduction - it couldn't recognize it from a technical aspect with the W2 form. I'm just about to blow $100+ on the online version, and thought maybe I'd ask here first. Has anybody used Home Business edition TT this year? Is it great like it used to be? Any snags? I know I was not alone last year with this business office deduction as April 14th this board and all other MT boards were jammed up with hundreds of us trying to figure out how to manually override this snag!  With no luck.... Anybody have any experiences with TT this year? Those are my only deductions, by the way - just home office and utilities, no other itemizations.  So it should be easy.... LOL! LOL!
At this for 30+ years. I think the thing to remember is yes, it is a business, when I am home to w
working. One thing I do to start off is treadmill every morning 30 minutes, just walk, no vigorous jogging too old, just enough to get those endorphins working and then start with my cup of coffee. I don't answer the phone for anyone unless its my mom. She only call is if something is wrong, otherwise I let the machine pick it up. I will if I have personal calls for myself take time when no work or do that rather than lunch for 40 minutes or so. I do the hour stretch. I also use weights, free weights by my desk I use to lift and stretch out my neck and arm muscles. I also use a ball twice a day to lie on and roll out the shoulders. This enables me to keep at it. No house chores. After I am done I do those. My kids are raised, but this job always enabled me to be here at home for them. I worked nights for a long time too broke up my work time when they were younger. So everything at home is workable with the right approach. Just remember, you are working, just because your home don't take personal calls. I don't think I would have done this for this many years if it was not work the $$. Be creative in your own routine have fun with it and make it work enjoyable. We can go out and have coffee in the sun on the deck in our PJs for our breaks, so remember the flexibility factor there.
I never do Part III (just 1 & II), and no 8829 either (don't know what it is for) - sm
we plan on moving one of these days and I do not want the nightmare the depreciation would cause us on our taxes when we sold. But write off everything else. I use Sch. C, Part II, # 18, 21 and 25 for all my stuff....and #13 for big stuff (i.e. computer) then do a 4562 for the whole amount. Have fun.
When I took a business trip one time, I came home to an immaculate house.
Then during the next few weeks, I couldn't find certain things like clothes, dishes, and items I kept on the counters. DH had decided to put all the dirty stuff out in the garage where the babysitter couldn't see it because he was embarrased by the mess he and the kids had made. There was mold and mildew on everything because he taped it inside boxes or stuffed it inside coolers, and he forgot to tell me about it.
If you use LecStar as your home/business phone service read this....sm

They had a judge sign a Chapter 7 bankruptcy order on 10/2 and have begun cutting off phone service to residental and business customers.  I found out about this when I attempted to make a long distance call today (I had the unlimited long distance home phone plan) and got notification that I had no long distance service available.  Upon calling them the representative told me that they're working on cutting phone service to everyone and at any time I could lose service.  I've called the "mega" phone service for my area, BellSouth, and signed up to switch hopefully before the line is disconnected by LecStar.

Interestingly I had signed up for their service through a cooperation they had with my power company.  The power company just found out yesterday about the bankruptcy and services starting to be cut off and is in the process now of calling every power company customer who had phone service with LecStar and telling them what is happening so that hopefully no one else will be caught off guard with a disconnected phone service. 


I think it's pretty easy. And I think is mis-typed. I use Quicken for Home & Business.

I am by no means an accounting-type person. I keep EVERYTHING in this program. I used to always have my checkbook screwed up. Now, I don't even bother with trying to keep a balance written in my checkbook register because I do everything from her. I have automatically scheduled transactions, reminders and bills set up. I actually now have a budget (unheard of before).

As far as invoicing, I have found it to be very easy. I would say my favorite feature is the ability to email invoices directly from the program to clients, saving me postage and the hassle of delayed payments because of PO delivery problems.. Another plus for me is that I have to collect sales tax and it set that up for me automatically when I set up my business--this makes it very easy for me to figure out my tax due each quarter.

Another plus is that you can set up Quicken to automatically download bank transactions every day so I can stay on top of what's going on with my money. It keeps me from missing those pesky ATM transactions that my husband makes in the family account!

It is not a plural form. It is a possessive form. SM
The man's name was Metzenbaum and he devised this particular instrument.  The correct spelling would be Metzenbaum's.  WITH THE APOSTROPHE.  AAMT BOS is full of crap.
Yes, thanks a lot - helped greatly!! NM
God has blessed me greatly too!!

Thank you SO much for the help...and Doctalk...you were GREAT...thanx for all the info. I am working on this as we speak and appreciate your giving me all the information you have....

It varies greatly...
Where I work the range is from 6 cpl up to almost 12 cpl so you just don't know. I guess decent is 10 or more. Anything less is not too good in my opinion especially considering I made 8 cents per GROSS line 10 years ago which would equal I don't know maybe around 11 cents per 65 character line and again that was 10 years ago. The only profession I know of where the pay continues to go down! Thanks technology! :(
Thanks for the info. Its greatly appreciated!nm.
Thanks ladies, greatly appreciated!!nm
Thanks for that info! Greatly appreciated!
Thank you both! Your advice is greatly appreciated. nm
Greatly depends on whether you are an IC or employee.
Katrina is going to impact us greatly in the wallets.
Prices everywhere are going to rise.  I am not an expert but I can almost feel everyone preparing to raise rates for services and products.  My biggest fear is insurance premiums.  Can anyone argue me out of this thought process?  
The incidence of errors could be greatly reduced - sm
if MTs were paid in such a way that they didn't have to positively RACE through everything they type, just to make a decent line count and an honest day's wage.
Take proofreading for example: Sometimes I think we come out ahead by NOT proofreading and taking our chances with missing an error, since if we really kick butt on our line counts, it can make up for being docked. But that goes against my nature. So I slow down enough to actually SEE what I'm typing, and then go back and proofread. It produces the best-possible quality of reports, but then eliminates any chance of a bonus because I can't reach that *carrot-on-a-stick* that is dangled a bit too high (in terms of a qualifying line count) for me to reach.
THANK YOU giddy pc guru! Your help is greatly appreciated.
you should really start using expanders now! That would greatly help your production - nm
I find that exercise has greatly improved the quality of my sleep
I used to need 10-11 hours of sleep to feel rested, but since I started exercising (40 minutes a day on an elliptical machine), I feel completely refreshed with 8 hours.
The Microsoft Wireless optical keyboard has greatly eased SM
The Microsoft Wireless Optical Desktop 1000 keyboard (came packaged with wireless mouse at Staples), box says "standard keyboard + optical mouse) has greatly, greatly relieved symptoms on my elbows and wrists.

My elbows just stung before I got this keyboard. If I relax and kind of let it do what it wants, kind of get used to its touch, I really like it. It has greatly helped my elbow symptoms in particular.
I have no expenses except to buy my
computer, desk and chair, which after time becomes a wash and are nominal expenses. All my references are online paid for by the company (all Stedman electronic word books, my free personal subscription to Monthly Prescribing Reference, etc.)
Maybe you can cut your expenses? sm
If you are using telephones for dictation, maybe switch to handheld units? Or use a TASP to save money on calls? Use the Internet more to cut down on expenses. Hope this helps. If you can, keep your clients. They are hard to come by nowadays.
Unfortunately it is legal..so yes it is business and they will continue with bad business practices
Remember that's $40 before all expenses. nm
Medical expenses

January, 2000 - DH tore rotator cuff, needed MRI/arthrogram, followed by rotator cuff repair.

January, 2001 - I had foot surgery in podiatrist's office. 

January, 2002 - DH had cervical MRI/myelogram, followed by anterior cervical diskectomy with fusion, two levels.

January,  2003 - DH had knee MRI, followed by arthroscopy.

January, 2004 - I had LASIK surgery. 

OMYGOSH, it's almost January again! 

You can still deduct your MT expenses if your and IC - sm
regardless of taking the standard deduction. Your write offs for MT are on the Schedule C (not B). My husband and I take the standard deduction as we don't have enough on our Sch. B; then I write off all my IC deductions and report my income on the Sch. C.; putting the bottom line (income minus IC write-offs) on the 1040 line 12. So I am not quite clear on what you are talking about but I know how I do it is how most of us (if not all) do our deductions. You may want to do an amended return.
Tax Deductible Expenses
We ran a business for years from our home.  As far as I know, you can take the base rate of your telephone bill as an expense (which includes FCC taxes) and any long distance calls related directly to the business.  As for Home Owners Insurance, you can take 7% of the insurance because you use 7% of your home for your business.  Also, anything related to the business such as equipment, paper, tapes or special software programs can be taken as well.  If you have to travel to deliver the finished reports, I believe the rate is 28 cents a mile.  If you travel, you can also deduct any maintenance on your vehicle.   Hope this helps. 
Taxes, Expenses
I would have internet anyway; now I get to write it off. I would have long distance anyway; now I get to write it off. Everyone pays taxes and insurance, it is just a matter of who is doing the bookkeeping. Walmart STARTS at $8/hour and then when they pay all that same stuff they are really making $5- $6. You can write off ALL your health insurance, a portion of your utilities and the area you work in, computer, software, and other supplies.....save on gas (this is HUGE right now), work clothes, make up, day care, and and and. There's always more than one way to view something.
Also, are these figures before tax/expenses or after? sm
Some ICs might be quoting their pay before taxes and expense deductions, which isn't their ACTUAL pay for the year. If someone has their own accounts and says they bring in $50K per year, that's possible, but probably not the amount they receive free and clear.

I find it hard to believe anyone makes that much free and clear unless they are working 12 hours a day, every day, and pulling in a significantly high per-line rate. I'm not saying it can't be done, but I base this opinion on the fact that I make a very good line rate, type over 100 wpm for easy accounts I've had for years, and still don't bring in that kind of money free and clear. I come close with my gross income, but after taxes and expenses, it's only about 65% of that! And I work 9-10 hours a day with only one week of vacation per year.

Come to think of it, that's pretty sad when I see it on paper. LOL I'm going to go look for a new line of work now.
What is the cost of your living expenses? sm

I would really like to know this as mine seem high.  My cost for the bare minimum, not including insurance, medical costs or entertainment, is about $1,800.00 per month.

Is that high to most people?  TIA.

$350 a month for my share of expenses.
get a credit card just for your IC expenses
it will keep all your expenses in one place and you won't need to keep receipts, just the credit card statements. Other than that, track mileage, though to be frank most people will just claim an average mileage and then create a mileage journal if audited. Also if you will take the home office deduction, you can claim percentage of heating, etc. but easy enough to do that. Might be worth your while to consult with a CPA if you take the IC job, and then the first year that you do your taxes. He can explain everything you need and then you can take it from there. Just one or two more forms to fill out, nothing earth-shattering.
Poll: Earnings vs Expenses

1.  What are your monthly earnings -- just you (no spousal income) -- doesn't matter how many jobs....monthly earnings?

2.   Do you work more than one job?

3.  What is your base line rate?  If you have more than 1 job, list all base rates.

4.   Now what is the minimum bring-home pay you need to survive each month?  This is your housing, energy, transportation, insurances, food -- what you have to have to make it. 

5.   What's the difference?  Are you in the hole?  Got surplus?  Breaking even?

My answers:

1.   About $3100 each month.

2.   One job.

3.   $0.095 cpl plus some incentive bonus each month.

4.   $2287 gets everything paid.  Savings and pocket money not included in that figure.

5.   Surplus but not much.  Trying to save as much as possible and have a few greenbacks in my wallet each week. 



Was told could deduct pet expenses. sm.
If it is a dog and is over 50 pounds, you can claim its food, vet bills, pet insurance, vaccinations all that as long as your business is run from your home. It applies as a guard dog. It does not matter which breed the dog is either. This is the state of Missouri, not sure about other states.

I am gonna try it as we shelled out alot of money over a period of time for a dog that was poisoned. Luckily, he lived.
6 months of expenses "tucked/socked" away? No way. sm
I am the owner of a small transcription company. We have 50 transcriptionists. We invoice $150,000 per month. Our payroll, taxes, manager salaries, postage, bank fees, overhead, etc run approximately $140,000 per month. That means that we should have $840,000 tucked away somewhere. No way. We depend on our customers to pay. Our employees are paid on time and paid a decent rate. Our bills are paid. To say that someone needs 6 months of expenses put away is unrealistic and naive. Where did I attend school? For undergrad, University of Michigan, for graduate school, Northwestern University, with a master's degree in Business Management and a Bach degree in Finance. The rule of thumb is to have one payroll worth of cash on hand or a line of credit available equal to that amount.

It's really annoying that people can toss out comments like that, stating them as if they were fact, without any basis of fact. Most companies do not have close to a million dollars lying around. If they do, it is foolish.