I run a re-upholstery business out of my home. For 2007 and 2008 I claimed an office in my home. (I did the actual upholstery work in various parts of the house as space allowed). My home is 1607 Sq Ft and my office is 116 Sq Ft. However, for 2009 I built a 178 Sq Ft office/workshop in 1/2 of my garage at a cost of $1232.45. The garage was not included as part of the living area. Questions: How do I recalculate the percentage since the garage was not included as part if the original living area? In Turbo Tax, where and how do I claim the construction costs? David
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Hi there! For a seperate structure (garage, greenhouse, barn, etc.) the percentage test is not required. In turbo tax you have the option of adding more than one home office in your business expense interview screen. Add 1 for the garage 178 sq ft 100% business and leave the home office the same as last year assuming you still use the 116 sq ft office in your home in addition to what you built in the garage. The construction costs are considered an improvement and should be expensed over several years and not deducted in full this year as a cost.
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