Home Office on Amended

I have a client whose prior tax preparer made a friggin' mess of everything--truly among the greatest negligence I have ever seen. Incorrectly claimed enormous vehicle expenses and depreciation, but nothing for what is a dedicated home office (either on Schedule C, or reimbursed home office expense on 1120S). This space is the EXCLUSIVE office of the company/owner.

I need to amend one of the 1040s with Schedule C activity. At this point, any little bit of tax benefit is helpful. Simplified method was identified as approach to take, but then I was reminded in reading that for home office deductions, the simplified method needs to be elected on the timely filed, ORIGINAL return. My brain is fried right now...am I correctly interpreting that even if no home office deduction was claimed on ORIGINAL return, I CANNOT now make an election for the simplified deduction on amended return? Or is the language correctly interpreted that if a home office deduction was taken on timely, ORIGINAL return, the deduction method cannot be subsequently CHANGED on an amended return?

I know this is a basic question but I cannot seem to focus on anything long enough right now to come to a satisfactory conclusion.

Rev Proc 2013-13 states that the election to use the simplified method is made on the original timely filed return. I would interpret that to mean, not on an amended return even if no home office had been claimed.

See page 5

https://www.irs.gov/pub/irs-drop/rp-13-13.pdf

Since your already going to amend the return for all the other errors why not just go the long method for the home office expense deduction ? Reading into the return a little it appears the long method may be substantially more than the $5 per sq ft. Out here in California I have several clients with a legit home office deduction between $5,000 to $8,000

Since your already going to amend the return for all the other errors why not just go the long method for the home office expense deduction ? Reading into the return a little it appears the long method may be substantially more than the $5 per sq ft. Out here in California I have several clients with a legit home office deduction between $5,000 to $8,000

Client records, primarily. He never thought of home office, or was advised of it, so in our discussion he indicated he would not have documentation to substantiate his actual expenses. He does for 2017 since I raised the subject and told him what he needed and how to handle it under his S-Corp election effective 1/1/16.

I will raise the topic again since the amended I am referring to is for 2015, primarily Schedule C activity--I just know my client is feeling overwhelmed and wanted a simple approach if doable.

Cornerstone CPA wrote :

"I just know my client is feeling overwhelmed and wanted a simple approach if doable "

Completely understand that .Certainly the simple approach ($5 per sq.ft ) is doable and easy peas i . However if you provide your client a rough estimate of the potential savings from using an office in home method, as well as gaining his confidence that if his numbers are correct there should be no worry, why wouldn't a reasonable person accept that ?

Again your going to be setting the detailed method up for 2018 so why not just push the work to the 2015 amended?

Detailed approach began 2017. I'll talk to him again to see if he thinks he can gather up sufficient support to claim actual. Seems the consensus is that the simplified approach cannot be taken on an amended return, even if no home office deduction was claimed on original.

Yes that is the consensus option if you consider two a consensus .

I do many long form office in home deductions (8829 ) for sole proprietors and I will tell you that none of them are perfect because of all the data required on the expense side (utilities ,repairs, insurance, other expenses ) . However keep in mind you should have nailed down three of the largest components in mortgage interest ,property taxes , and depreciation. My experience is that, if anything, home office deduction is usually understated because of poor record keeping. Whoops I forgot to include the outside painting in the expenses or darn I forgot to include the housekeeping ,or monthly security service bill .

Yes that is the consensus option if you consider two a consensus .

No, TaxMonkey's link in post #2 is the "consensus option" (?), i.e. the correct answer.

Out here in California

That made me chuckle. "Out here"? Really?

Various interpretations:

"out there means not here. It means somewhere off in the distance where things are unfamiliar and less safe than right here. "

"Out here is used when you are conversing with someone who doesn't originally belong to that place."

So, would Spell Czech refer to his/her location at U.S. Capitol as being "out here in D.C."?

So, would Spell Czech refer to his/her location at U.S. Capitol as being "out here in D.C."?

It doesn't get any more "in" than here at the Capitol building.

Consider:
Inside the Beltway,
In the District of Columbia,
At the very center of the NW, NE, SE, SW crosshairs,
And if you're in the building, too,
How much more "in" can you get?

Please note, if you will, that I haven't hinted at or mentioned or alluded even vaguely to being "in" with respect to one's political polarity.

Equinox expected tomorrow!!! What time will it happen where you are? Watch for the bright flash!!