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2012 Tax Software

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2012 Tax Software

2012 tax software 35. 2012 tax software   Education Credits Table of Contents Introduction Useful Items - You may want to see: Who Can Claim an Education Credit Qualified Education ExpensesNo Double Benefit Allowed Adjustments to Qualified Education Expenses Introduction For 2013, there are two tax credits available to persons who pay expenses for higher (postsecondary) education. 2012 tax software They are: The American opportunity credit, and The lifetime learning credit. 2012 tax software The chapter will present an overview of these education credits. 2012 tax software To get the detailed information you will need to claim either of the credits, and for examples illustrating that information, see chapters 2 and 3 of Publication 970. 2012 tax software Can you claim more than one education credit this year?   For each student, you can choose for any year only one of the credits. 2012 tax software For example, if you choose to take the American opportunity credit for a child on your 2013 tax return, you cannot, for that same child, also claim the lifetime learning credit for 2013. 2012 tax software   If you are eligible to claim the American opportunity credit and you are also eligible to claim the lifetime learning credit for the same student in the same year, you can choose to claim either credit, but not both. 2012 tax software   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity and the lifetime learning credits on a per-student, per-year basis. 2012 tax software This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. 2012 tax software Table 35-1. 2012 tax software Comparison of Education Credits Caution. 2012 tax software You can claim both the American opportunity credit and the lifetime learning credit on the same return—but not for the same student. 2012 tax software   American Opportunity Credit Lifetime Learning Credit Maximum credit Up to $2,500 credit per eligible student Up to $2,000 credit per return Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly;  $90,000 if single, head of household, or qualifying widow(er) $127,000 if married filing jointly;  $63,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable Credit limited to the amount of tax you must pay on your taxable income Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Available for all years of postsecondary education and for courses to acquire or improve job skills Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) the Hope credit was claimed) Available for an unlimited number of years Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Student does not need to be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period beginning during the tax year Available for one or more courses Felony drug conviction At the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Felony drug convictions do not make the student ineligible Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Differences between the American opportunity and lifetime learning credits. 2012 tax software   There are several differences between these two credits. 2012 tax software These differences are summarized in Table 35-1, later. 2012 tax software Useful Items - You may want to see: Publication 970 Tax Benefits for Education Form (and Instructions) 8863 Education Credits (American Opportunity and Lifetime Learning Credits) Who Can Claim an Education Credit You may be able to claim an education credit if you, your spouse, or a dependent you claim on your tax return was a student enrolled at or attending an eligible educational institution. 2012 tax software The credits are based on the amount of qualified education expenses paid for the student in 2013 for academic periods beginning in 2013 and in the first 3 months of 2014. 2012 tax software For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning in January 2014, you may be able to use that $1,500 in figuring your 2013 education credit(s). 2012 tax software Academic period. 2012 tax software   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. 2012 tax software In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. 2012 tax software Eligible educational institution. 2012 tax software   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. 2012 tax software S. 2012 tax software Department of Education. 2012 tax software It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 2012 tax software The educational institution should be able to tell you if it is an eligible educational institution. 2012 tax software   Certain educational institutions located outside the United States also participate in the U. 2012 tax software S. 2012 tax software Department of Education's Federal Student Aid (FSA) programs. 2012 tax software Who can claim a dependent's expenses. 2012 tax software   If an exemption is allowed as a deduction for any person who claims the student as a dependent, all qualified education expenses of the student are treated as having been paid by that person. 2012 tax software Therefore, only that person can claim an education credit for the student. 2012 tax software If a student is not claimed as a dependent on another person's tax return, only the student can claim a credit. 2012 tax software Expenses paid by a third party. 2012 tax software   Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. 2012 tax software However, qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. 2012 tax software Therefore, you are treated as having paid expenses that were paid by the third party. 2012 tax software For more information and an example see Who Can Claim a Dependent's Expenses in Pub. 2012 tax software 970, chapter 2 or 3. 2012 tax software Who cannot claim a credit. 2012 tax software   You cannot take an education credit if any of the following apply. 2012 tax software You are claimed as a dependent on another person's tax return, such as your parent's return. 2012 tax software Your filing status is married filing separately. 2012 tax software You (or your spouse) were a nonresident alien for any part of 2013 and did not elect to be treated as a resident alien for tax purposes. 2012 tax software Your MAGI is one of the following. 2012 tax software American opportunity credit: $180,000 or more if married filing jointly, or $90,000 or more if single, head of household, or qualifying widow(er). 2012 tax software Lifetime learning credit: $127,000 or more if married filing jointly, or $63,000 or more if single, head of household, or qualifying widow(er) . 2012 tax software   Generally, your MAGI is the amount on your Form 1040, line 38, or Form 1040A, line 22. 2012 tax software However, if you are filing Form 2555, Form 2555–EZ, or Form 4563, or are excluding income from Puerto RIco, add to the amount on your Form 1040, line 38, or Form 1040A, line 22, the amount of income you excluded. 2012 tax software For details, see Pub. 2012 tax software 970. 2012 tax software    Figure 35-A may be helpful in determining if you can claim an education credit on your tax return. 2012 tax software The American opportunity credit will always be greater than or equal to the lifetime learning credit for any student who is eligible for both credits. 2012 tax software However, if any of the conditions for the American opportunity credit, listed in Table 35-1 earlier, are not met for any student, you cannot take the American opportunity credit for that student. 2012 tax software You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. 2012 tax software See Pub. 2012 tax software 970 for information on other education benefits. 2012 tax software Qualified Education Expenses Generally, qualified education expenses are amounts paid in 2013 for tuition and fees required for the student's enrollment or attendance at an eligible educational institution. 2012 tax software It does not matter whether the expenses were paid in cash, by check, by credit or debit card, or with borrowed funds. 2012 tax software For course-related books, supplies, and equipment, only certain expenses qualify. 2012 tax software American opportunity credit: Qualified education expenses include amounts spent on books, supplies, and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance. 2012 tax software Lifetime learning credit: Qualified education expenses include amounts for books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance. 2012 tax software Qualified education expenses include nonacademic fees, such as student activity fees, athletic fees, or other expenses unrelated to the academic course of instruction, only if the fee must be paid to the institution as a condition of enrollment or attendance. 2012 tax software However, fees for personal expenses (described below) are never qualified education expenses. 2012 tax software Qualified education expenses for either credit do not include amounts paid for: Personal expenses. 2012 tax software This means room and board, insurance, medical expenses (including student health fees), transportation, and other similar personal, living, or family expenses. 2012 tax software Any course or other education involving sports, games, or hobbies, or any noncredit course, unless such course or other education is part of the student's degree program or (for the lifetime learning credit only) helps the student acquire or improve job skills. 2012 tax software You should receive Form 1098–T, Tuition Statement, from the institution reporting either payments received in 2013 (box 1) or amounts billed in 2013 (box 2). 2012 tax software However, the amount in box 1 or 2 of Form 1098–T may be different from the amount you paid (or are treated as having paid). 2012 tax software In completing Form 8863, use only the amounts you actually paid (plus any amounts you are treated as having paid) in 2013, reduced as necessary, as described in Adjustments to Qualified Education Expenses , later. 2012 tax software Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. 2012 tax software Qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. 2012 tax software If you or the student takes a deduction for higher education expenses, such as on Schedule A or C (Form 1040), you cannot use those expenses in your qualified education expenses when figuring your education credits. 2012 tax software Qualified education expenses for any academic period must be reduced by any tax-free educational assistance allocable to that academic period. 2012 tax software See Adjustments to Qualified Education Expenses, later. 2012 tax software Prepaid Expenses. 2012 tax software   Qualified education expenses paid in 2013 for an academic period that begins in the first 3 months of 2014 can be used in figuring an education credit for 2013 only. 2012 tax software See Academic period , earlier. 2012 tax software For example, if you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). 2012 tax software    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). 2012 tax software Paid with borrowed funds. 2012 tax software   You can claim an education credit for qualified education expenses paid with the proceeds of a loan. 2012 tax software Use the expenses to figure the credit for the year in which the expenses are paid, not the year in which the loan is repaid. 2012 tax software Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. 2012 tax software Student withdraws from class(es). 2012 tax software   You can claim an education credit for qualified education expenses not refunded when a student withdraws. 2012 tax software No Double Benefit Allowed You cannot do any of the following. 2012 tax software Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an education credit based on those same expenses. 2012 tax software Claim more than one education credit based on the same qualified education expenses. 2012 tax software Claim an education credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). 2012 tax software Claim an education credit based on qualified education expenses paid with educational assistance, such as a tax-free scholarship, grant, or employer-provided educational assistance. 2012 tax software See Adjustments to Qualified Education Expenses, next. 2012 tax software Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid in 2013 by or on behalf of that student under the following rules. 2012 tax software The result is the amount of adjusted qualified education expenses for each student. 2012 tax software Tax-free educational assistance. 2012 tax software   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. 2012 tax software See Academic period , earlier. 2012 tax software      Tax-free educational assistance includes:    Tax-free parts of scholarships and fellowships (see chapter 12 of this publication and chapter 1 of Pub. 2012 tax software 970), The tax-free part of Pell grants (see chapter 1 of Pub. 2012 tax software 970), The tax-free part of employer-provided educational assistance (see Pub. 2012 tax software 970), Veterans' educational assistance (see chapter 1 of Pub. 2012 tax software 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 2012 tax software Generally, any scholarship or fellowship is treated as tax-free educational assistance. 2012 tax software However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent the student includes it in gross income (if the student is required to file a tax return) for the year the scholarship or fellowship is received and either: The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. 2012 tax software 970, chapter 1; or The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. 2012 tax software 970, chapter 1. 2012 tax software You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year received. 2012 tax software For details, see Adjustments of Qualified Education Expenses, in chapters 2 and 3 of Pub. 2012 tax software 970. 2012 tax software Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. 2012 tax software This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). 2012 tax software If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed, later. 2012 tax software If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed, later. 2012 tax software Refunds. 2012 tax software   A refund of qualified education expenses may reduce qualified education expenses for the tax year or may require you to repay (recapture) the credit that you claimed in an earlier year. 2012 tax software Some tax-free educational assistance received after 2013 may be treated as a refund. 2012 tax software See Tax-free educational assistance, earlier. 2012 tax software Refunds received in 2013. 2012 tax software   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses paid in 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. 2012 tax software Refunds received after 2013 but before your income tax return is filed. 2012 tax software   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received before you file your 2013 income tax return, reduce the amount of qualified education expenses for 2013 by the amount of the refund. 2012 tax software Refunds received after 2013 and after your income tax return is filed. 2012 tax software   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received after you file your 2013 income tax return, you may need to repay some or all of the credit that you claimed. 2012 tax software See Credit recapture, next. 2012 tax software Credit recapture. 2012 tax software    If any tax-free educational assistance for the qualified education expenses paid in 2013, or any refund of your qualified education expenses paid in 2013, is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. 2012 tax software You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. 2012 tax software You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you had claimed the refigured credit(s). 2012 tax software Include that amount as an additional tax for the year the refund or tax-free assistance was received. 2012 tax software Example. 2012 tax software    You paid $8,000 tuition and fees in December 2013 for your child's Spring semester beginning in January 2014. 2012 tax software You filed your 2013 tax return on February 3, 2014, and claimed a lifetime learning credit of $1,600 ($8,000 qualified education expense paid x . 2012 tax software 20). 2012 tax software You claimed no other tax credits. 2012 tax software After you filed your return, your child withdrew from two courses and you received a refund of $1,400. 2012 tax software You must refigure your 2013 lifetime learning credit using $6,600 ($8,000 qualified education expenses − $1,400 refund). 2012 tax software The refigured credit is $1,320 and your tax liability increased by $280. 2012 tax software You must include the difference of $280 ($1,600 credit originally claimed − $1,320 refigured credit) as additional tax on your 2014 income tax return. 2012 tax software See the instructions for your 2014 income tax return to determine where to include this tax. 2012 tax software If you also pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. 2012 tax software Amounts that do not reduce qualified education expenses. 2012 tax software   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. 2012 tax software   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. 2012 tax software The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses, as defined in Chapter 1 of Pub. 2012 tax software 970. 2012 tax software The use of the money is not restricted. 2012 tax software   For examples, see chapter 2 in Pub. 2012 tax software 970. 2012 tax software Figure 35-A. 2012 tax software Can You Claim an Education Credit for 2013? This image is too large to be displayed in the current screen. 2012 tax software Please click the link to view the image. 2012 tax software Figure 35-A. 2012 tax software Can You Claim an Education Credit for 2013? Prev  Up  Next   Home   More Online Publications
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2012 tax software Publication 587 - Main Content Table of Contents Qualifying for a DeductionExclusive Use Regular Use Trade or Business Use Principal Place of Business Place To Meet Patients, Clients, or Customers Separate Structure Figuring the DeductionUsing Actual Expenses Using the Simplified Method Daycare Facility Standard meal and snack rates. 2012 tax software Sale or Exchange of Your HomeGain on Sale Depreciation Basis Adjustment Reporting the Sale More Information Business Furniture and EquipmentListed Property Property Bought for Business Use Personal Property Converted to Business Use Recordkeeping Where To DeductSelf-Employed Persons Employees Partners How To Get Tax HelpLow Income Taxpayer Clinics Worksheet To Figure the Deduction for Business Use of Your HomeInstructions for the Worksheet Worksheets To Figure the Deduction for Business Use of Your Home (Simplified Method) Instructions for the Simplified Method Worksheet Instructions for the Daycare Facility Worksheet Instructions for the Area Adjustment Worksheet Qualifying for a Deduction Generally, you cannot deduct items related to your home, such as mortgage interest, real estate taxes, utilities, maintenance, rent, depreciation, or property insurance, as business expenses. 2012 tax software However, you may be able to deduct expenses related to the business use of part of your home if you meet specific requirements. 2012 tax software Even then, the deductible amount of these types of expenses may be limited. 2012 tax software Use this section and Figure A, later, to decide if you can deduct expenses for the business use of your home. 2012 tax software To qualify to deduct expenses for business use of your home, you must use part of your home: Exclusively and regularly as your principal place of business (defined later), Exclusively and regularly as a place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, In the case of a separate structure which is not attached to your home, in connection with your trade or business, On a regular basis for certain storage use (see Storage of inventory or product samples , later), For rental use (see Publication 527), or As a daycare facility (see Daycare Facility , later). 2012 tax software Additional tests for employee use. 2012 tax software   If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. 2012 tax software You must meet the tests discussed earlier plus: Your business use must be for the convenience of your employer, and You must not rent any part of your home to your employer and use the rented portion to perform services as an employee for that employer. 2012 tax software If the use of the home office is merely appropriate and helpful, you cannot deduct expenses for the business use of your home. 2012 tax software Exclusive Use To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. 2012 tax software The area used for business can be a room or other separately identifiable space. 2012 tax software The space does not need to be marked off by a permanent partition. 2012 tax software You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes. 2012 tax software Example. 2012 tax software You are an attorney and use a den in your home to write legal briefs and prepare clients' tax returns. 2012 tax software Your family also uses the den for recreation. 2012 tax software The den is not used exclusively in your trade or business, so you cannot claim a deduction for the business use of the den. 2012 tax software Exceptions to Exclusive Use You do not have to meet the exclusive use test if either of the following applies. 2012 tax software You use part of your home for the storage of inventory or product samples (discussed next). 2012 tax software You use part of your home as a daycare facility, discussed later under Daycare Facility . 2012 tax software Note. 2012 tax software With the exception of these two uses, any portion of the home used for business purposes must meet the exclusive use test. 2012 tax software Storage of inventory or product samples. 2012 tax software    If you use part of your home for storage of inventory or product samples, you can deduct expenses for the business use of your home without meeting the exclusive use test. 2012 tax software However, you must meet all the following tests. 2012 tax software You sell products at wholesale or retail as your trade or business. 2012 tax software You keep the inventory or product samples in your home for use in your trade or business. 2012 tax software Your home is the only fixed location of your trade or business. 2012 tax software You use the storage space on a regular basis. 2012 tax software The space you use is a separately identifiable space suitable for storage. 2012 tax software Example. 2012 tax software Your home is the only fixed location of your business of selling mechanics' tools at retail. 2012 tax software You regularly use half of your basement for storage of inventory and product samples. 2012 tax software You sometimes use the area for personal purposes. 2012 tax software The expenses for the storage space are deductible even though you do not use this part of your basement exclusively for business. 2012 tax software Regular Use To qualify under the regular use test, you must use a specific area of your home for business on a regular basis. 2012 tax software Incidental or occasional business use is not regular use. 2012 tax software You must consider all facts and circumstances in determining whether your use is on a regular basis. 2012 tax software Trade or Business Use To qualify under the trade-or-business-use test, you must use part of your home in connection with a trade or business. 2012 tax software If you use your home for a profit-seeking activity that is not a trade or business, you cannot take a deduction for its business use. 2012 tax software Example. 2012 tax software You use part of your home exclusively and regularly to read financial periodicals and reports, clip bond coupons, and carry out similar activities related to your own investments. 2012 tax software You do not make investments as a broker or dealer. 2012 tax software So, your activities are not part of a trade or business and you cannot take a deduction for the business use of your home. 2012 tax software Principal Place of Business You can have more than one business location, including your home, for a single trade or business. 2012 tax software To qualify to deduct the expenses for the business use of your home under the principal place of business test, your home must be your principal place of business for that trade or business. 2012 tax software To determine whether your home is your principal place of business, you must consider: The relative importance of the activities performed at each place where you conduct business, and The amount of time spent at each place where you conduct business. 2012 tax software Your home office will qualify as your principal place of business if you meet the following requirements. 2012 tax software You use it exclusively and regularly for administrative or management activities of your trade or business. 2012 tax software You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. 2012 tax software If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. 2012 tax software However, see the later discussions under Place To Meet Patients, Clients, or Customers and Separate Structure for other ways to qualify to deduct home office expenses. 2012 tax software Administrative or management activities. 2012 tax software   There are many activities that are administrative or managerial in nature. 2012 tax software The following are a few examples. 2012 tax software Billing customers, clients, or patients. 2012 tax software Keeping books and records. 2012 tax software Ordering supplies. 2012 tax software Setting up appointments. 2012 tax software Forwarding orders or writing reports. 2012 tax software Administrative or management activities performed at other locations. 2012 tax software   The following activities performed by you or others will not disqualify your home office from being your principal place of business. 2012 tax software You have others conduct your administrative or management activities at locations other than your home. 2012 tax software (For example, another company does your billing from its place of business. 2012 tax software ) You conduct administrative or management activities at places that are not fixed locations of your business, such as in a car or a hotel room. 2012 tax software You occasionally conduct minimal administrative or management activities at a fixed location outside your home. 2012 tax software You conduct substantial nonadministrative or nonmanagement business activities at a fixed location outside your home. 2012 tax software (For example, you meet with or provide services to customers, clients, or patients at a fixed location of the business outside your home. 2012 tax software ) You have suitable space to conduct administrative or management activities outside your home, but choose to use your home office for those activities instead. 2012 tax software Please click here for the text description of the image. 2012 tax software Can you deduct business use of the home expenses? Example 1. 2012 tax software John is a self-employed plumber. 2012 tax software Most of John's time is spent at customers' homes and offices installing and repairing plumbing. 2012 tax software He has a small office in his home that he uses exclusively and regularly for the administrative or management activities of his business, such as phoning customers, ordering supplies, and keeping his books. 2012 tax software John writes up estimates and records of work completed at his customers' premises. 2012 tax software He does not conduct any substantial administrative or management activities at any fixed location other than his home office. 2012 tax software John does not do his own billing. 2012 tax software He uses a local bookkeeping service to bill his customers. 2012 tax software John's home office qualifies as his principal place of business for deducting expenses for its use. 2012 tax software He uses the home office for the administrative or managerial activities of his plumbing business and he has no other fixed location where he conducts these administrative or managerial activities. 2012 tax software His choice to have his billing done by another company does not disqualify his home office from being his principal place of business. 2012 tax software He meets all the qualifications, including principal place of business, so he can deduct expenses (subject to certain limitations, explained later) for the business use of his home. 2012 tax software Example 2. 2012 tax software Pamela is a self-employed sales representative for several different product lines. 2012 tax software She has an office in her home that she uses exclusively and regularly to set up appointments and write up orders and other reports for the companies whose products she sells. 2012 tax software She occasionally writes up orders and sets up appointments from her hotel room when she is away on business overnight. 2012 tax software Pamela's business is selling products to customers at various locations throughout her territory. 2012 tax software To make these sales, she regularly visits customers to explain the available products and take orders. 2012 tax software Pamela's home office qualifies as her principal place of business for deducting expenses for its use. 2012 tax software She conducts administrative or management activities there and she has no other fixed location where she conducts substantial administrative or management activities. 2012 tax software The fact that she conducts some administrative or management activities in her hotel room (not a fixed location) does not disqualify her home office from being her principal place of business. 2012 tax software She meets all the qualifications, including principal place of business, so she can deduct expenses (subject to certain limitations, explained later) for the business use of her home. 2012 tax software Example 3. 2012 tax software Paul is a self-employed anesthesiologist. 2012 tax software He spends the majority of his time administering anesthesia and postoperative care in three local hospitals. 2012 tax software One of the hospitals provides him with a small shared office where he could conduct administrative or management activities. 2012 tax software Paul very rarely uses the office the hospital provides. 2012 tax software He uses a room in his home that he has converted to an office. 2012 tax software He uses this room exclusively and regularly to conduct all the following activities. 2012 tax software Contacting patients, surgeons, and hospitals regarding scheduling. 2012 tax software Preparing for treatments and presentations. 2012 tax software Maintaining billing records and patient logs. 2012 tax software Satisfying continuing medical education requirements. 2012 tax software Reading medical journals and books. 2012 tax software Paul's home office qualifies as his principal place of business for deducting expenses for its use. 2012 tax software He conducts administrative or management activities for his business as an anesthesiologist there and he has no other fixed location where he conducts substantial administrative or management activities for this business. 2012 tax software His choice to use his home office instead of the one provided by the hospital does not disqualify his home office from being his principal place of business. 2012 tax software His performance of substantial nonadministrative or nonmanagement activities at fixed locations outside his home also does not disqualify his home office from being his principal place of business. 2012 tax software He meets all the qualifications, including principal place of business, so he can deduct expenses (subject to certain limitations, explained later) for the business use of his home. 2012 tax software Example 4. 2012 tax software Kathleen is employed as a teacher. 2012 tax software She is required to teach and meet with students at the school and to grade papers and tests. 2012 tax software The school provides her with a small office where she can work on her lesson plans, grade papers and tests, and meet with parents and students. 2012 tax software The school does not require her to work at home. 2012 tax software Kathleen prefers to use the office she has set up in her home and does not use the one provided by the school. 2012 tax software She uses this home office exclusively and regularly for the administrative duties of her teaching job. 2012 tax software Kathleen must meet the convenience-of-the-employer test, even if her home qualifies as her principal place of business for deducting expenses for its use. 2012 tax software Her employer provides her with an office and does not require her to work at home, so she does not meet the convenience-of-the-employer test and cannot claim a deduction for the business use of her home. 2012 tax software More Than One Trade or Business The same home office can be the principal place of business for two or more separate business activities. 2012 tax software Whether your home office is the principal place of business for more than one business activity must be determined separately for each of your trade or business activities. 2012 tax software You must use the home office exclusively and regularly for one or more of the following purposes. 2012 tax software As the principal place of business for one or more of your trades or businesses. 2012 tax software As a place to meet or deal with patients, clients, or customers in the normal course of one or more of your trades or businesses. 2012 tax software If your home office is a separate structure, in connection with one or more of your trades or businesses. 2012 tax software You can use your home office for more than one business activity, but you cannot use it for any nonbusiness (i. 2012 tax software e. 2012 tax software , personal) activities. 2012 tax software If you are an employee, any use of the home office in connection with your employment must be for the convenience of your employer. 2012 tax software See Rental to employer , later, if you rent part of your home to your employer. 2012 tax software Example. 2012 tax software Tracy White is employed as a teacher. 2012 tax software Her principal place of work is the school, which provides her office space to do her school work. 2012 tax software She also has a mail order jewelry business. 2012 tax software All her work in the jewelry business is done in her home office and the office is used exclusively for that business. 2012 tax software If she meets all the other tests, she can deduct expenses for the business use of her home for the jewelry business. 2012 tax software If Tracy also uses the office for work related to her teaching, she must meet the exclusive use test for both businesses to qualify for the deduction. 2012 tax software As an employee, Tracy must also meet the convenience-of-the-employer test to qualify for the deduction. 2012 tax software She does not meet this test for her work as a teacher, so she cannot claim a deduction for the business use of her home for either activity. 2012 tax software Place To Meet Patients, Clients, or Customers If you meet or deal with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business if you meet both the following tests. 2012 tax software You physically meet with patients, clients, or customers on your premises. 2012 tax software Their use of your home is substantial and integral to the conduct of your business. 2012 tax software Doctors, dentists, attorneys, and other professionals who maintain offices in their homes generally will meet this requirement. 2012 tax software Using your home for occasional meetings and telephone calls will not qualify you to deduct expenses for the business use of your home. 2012 tax software The part of your home you use exclusively and regularly to meet patients, clients, or customers does not have to be your principal place of business. 2012 tax software Example. 2012 tax software June Quill, a self-employed attorney, works 3 days a week in her city office. 2012 tax software She works 2 days a week in her home office used only for business. 2012 tax software She regularly meets clients there. 2012 tax software Her home office qualifies for a business deduction because she meets clients there in the normal course of her business. 2012 tax software Separate Structure You can deduct expenses for a separate free-standing structure, such as a studio, workshop, garage, or barn, if you use it exclusively and regularly for your business. 2012 tax software The structure does not have to be your principal place of business or a place where you meet patients, clients, or customers. 2012 tax software Example. 2012 tax software John Berry operates a floral shop in town. 2012 tax software He grows the plants for his shop in a greenhouse behind his home. 2012 tax software He uses the greenhouse exclusively and regularly in his business, so he can deduct the expenses for its use, subject to certain limitations, explained later. 2012 tax software Figuring the Deduction After you determine that you meet the tests under Qualifying for a Deduction , you can begin to figure how much you can deduct. 2012 tax software When figuring the amount you can deduct for the business use of your home, you will use either your actual expenses or a simplified method. 2012 tax software Electing to use the simplified method. 2012 tax software   The simplified method is an alternative to the calculation, allocation, and substantiation of actual expenses. 2012 tax software You choose whether or not to figure your deduction using the simplified method each taxable year. 2012 tax software See Using the Simplified Method , later. 2012 tax software Rental to employer. 2012 tax software   If you rent part of your home to your employer and you use the rented part in performing services for your employer as an employee, your deduction for the business use of your home is limited. 2012 tax software You can deduct mortgage interest, qualified mortgage insurance premiums, real estate taxes, and personal casualty losses for the rented part, subject to any limitations. 2012 tax software However, you cannot deduct otherwise allowable trade or business expenses, business casualty losses, or depreciation related to the use of your home (or use the simplified method as an alternative to deducting these actual expenses) in performing services for your employer. 2012 tax software Using Actual Expenses If you do not or cannot elect to use the simplified method for a home, you will figure your deduction for that home using your actual expenses. 2012 tax software You will also need to figure the percentage of your home used for business and the limit on the deduction. 2012 tax software If you are an employee or a partner, or you use your home in your farming business and you file Schedule F (Form 1040), you can use the Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication, to help you figure your deduction. 2012 tax software If you use your home in a trade or business and you file Schedule C (Form 1040), you will use Form 8829 to figure your deduction. 2012 tax software Part-year use. 2012 tax software   You cannot deduct expenses for the business use of your home incurred during any part of the year you did not use your home for business purposes. 2012 tax software For example, if you begin using part of your home for business on July 1, and you meet all the tests from that date until the end of the year, consider only your expenses for the last half of the year in figuring your allowable deduction. 2012 tax software Expenses related to tax-exempt income. 2012 tax software   Generally, you cannot deduct expenses that are related to tax-exempt allowances. 2012 tax software However, if you receive a tax-exempt parsonage allowance or a tax-exempt military allowance, your expenses for mortgage interest and real estate taxes are deductible under the normal rules. 2012 tax software No deduction is allowed for other expenses related to the tax-exempt allowance. 2012 tax software   If your housing is provided free of charge and the value of the housing is tax exempt, you cannot deduct the rental value of any portion of the housing. 2012 tax software Actual Expenses You must divide the expenses of operating your home between personal and business use. 2012 tax software The part of a home operating expense you can use to figure your deduction depends on both of the following. 2012 tax software Whether the expense is direct, indirect, or unrelated. 2012 tax software The percentage of your home used for business. 2012 tax software Table 1, next, describes the types of expenses you may have and the extent to which they are deductible. 2012 tax software Table 1. 2012 tax software Types of Expenses  Expense  Description  Deductibility Direct Expenses only for  the business part  of your home. 2012 tax software Deductible in full. 2012 tax software *   Examples:  Painting or repairs  only in the area  used for business. 2012 tax software Exception: May be only partially  deductible in a daycare facility. 2012 tax software See Daycare Facility , later. 2012 tax software Indirect Expenses for  keeping up and running your  entire home. 2012 tax software Deductible based on the percentage of your home used for business. 2012 tax software *   Examples:  Insurance, utilities, and  general repairs. 2012 tax software   Unrelated Expenses only for  the parts of your  home not used  for business. 2012 tax software Not deductible. 2012 tax software   Examples:  Lawn care or painting  a room not used  for business. 2012 tax software   *Subject to the deduction limit, discussed later. 2012 tax software Form 8829 and the Worksheet To Figure the Deduction for Business Use of Your Home have separate columns for direct and indirect expenses. 2012 tax software Certain expenses are deductible whether or not you use your home for business. 2012 tax software If you qualify to deduct business use of the home expenses, use the business percentage of these expenses to figure your total business use of the home deduction. 2012 tax software These expenses include the following. 2012 tax software Real estate taxes. 2012 tax software Qualified mortgage insurance premiums. 2012 tax software Deductible mortgage interest. 2012 tax software Casualty losses. 2012 tax software Other expenses are deductible only if you use your home for business. 2012 tax software You can use the business percentage of these expenses to figure your total business use of the home deduction. 2012 tax software These expenses generally include (but are not limited to) the following. 2012 tax software Depreciation (covered under Depreciating Your Home , later). 2012 tax software Insurance. 2012 tax software Rent paid for the use of property you do not own but use in your trade or business. 2012 tax software Repairs. 2012 tax software Security system. 2012 tax software Utilities and services. 2012 tax software Real estate taxes. 2012 tax software   To figure the business part of your real estate taxes, multiply the real estate taxes paid by the percentage of your home used for business. 2012 tax software   For more information on the deduction for real estate taxes, see Publication 530, Tax Information for Homeowners. 2012 tax software Deductible mortgage interest. 2012 tax software   To figure the business part of your deductible mortgage interest, multiply this interest by the percentage of your home used for business. 2012 tax software You can include interest on a second mortgage in this computation. 2012 tax software If your total mortgage debt is more than $1,000,000 or your home equity debt is more than $100,000, your deduction may be limited. 2012 tax software For more information on what interest is deductible, see Publication 936, Home Mortgage Interest Deduction. 2012 tax software Qualified mortgage insurance premiums. 2012 tax software   To figure the business part of your qualified mortgage insurance premiums, multiply the premiums by the percentage of your home used for business. 2012 tax software You can include premiums for insurance on a second mortgage in this computation. 2012 tax software If your adjusted gross income is more than $100,000 ($50,000 if your filing status is married filing separately), your deduction may be limited. 2012 tax software For more information, see Publication 936, and Line 13 in the Instructions for Schedule A (Form 1040). 2012 tax software Casualty losses. 2012 tax software    If you have a casualty loss on your home that you use for business, treat the casualty loss as a direct expense, an indirect expense, or an unrelated expense, depending on the property affected. 2012 tax software A direct expense is the loss on the portion of the property you use only in your business. 2012 tax software Use the entire loss to figure the business use of the home deduction. 2012 tax software An indirect expense is the loss on property you use for both business and personal purposes. 2012 tax software Use only the business portion to figure the deduction. 2012 tax software An unrelated expense is the loss on property you do not use in your business. 2012 tax software Do not use any of the loss to figure the deduction. 2012 tax software Example. 2012 tax software You meet the rules to take a deduction for an office in your home that is 10% of the total area of your house. 2012 tax software A storm damages your roof. 2012 tax software This is an indirect expense as the roof is part of the whole house and is considered to be used both for business and personal purposes. 2012 tax software You would complete Form 4684, Casualties and Thefts, to report your loss. 2012 tax software You complete both section A (Personal Use Property) and section B (Business and Income-Producing Property) as your home is used both for business and personal purposes. 2012 tax software Since you use 90% of your home for personal purposes, use 90% of the cost or adjusted basis of your home, insurance or other reimbursement, and fair market value, both before and after the storm, to figure the amounts to enter on lines 2, 3, 5, and 6 of Form 4684. 2012 tax software Since you use 10% of your home for business purposes, use 10% of the cost or adjusted basis of your home, insurance or other reimbursement, and fair market value, both before and after the storm, to figure the amounts to enter on lines 20, 21, 23, and 24 of Form 4684. 2012 tax software Forms and worksheets to use. 2012 tax software   If you are filing Schedule C (Form 1040), get Form 8829 and follow the instructions for casualty losses. 2012 tax software If you are an employee or a partner, or you file Schedule F (Form 1040), use the Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication. 2012 tax software You will also need to get Form 4684. 2012 tax software More information. 2012 tax software   For more information on casualty losses, see Publication 547, Casualties, Disasters, and Thefts. 2012 tax software Insurance. 2012 tax software   You can deduct the cost of insurance that covers the business part of your home. 2012 tax software However, if your insurance premium gives you coverage for a period that extends past the end of your tax year, you can deduct only the business percentage of the part of the premium that gives you coverage for your tax year. 2012 tax software You can deduct the business percentage of the part that applies to the following year in that year. 2012 tax software Rent. 2012 tax software   If you rent the home you occupy and meet the requirements for business use of the home, you can deduct part of the rent you pay. 2012 tax software To figure your deduction, multiply your rent payments by the percentage of your home used for business. 2012 tax software   If you own your home, you cannot deduct the fair rental value of your home. 2012 tax software However, see Depreciating Your Home , later. 2012 tax software Repairs. 2012 tax software   The cost of repairs that relate to your business, including labor (other than your own labor), is a deductible expense. 2012 tax software For example, a furnace repair benefits the entire home. 2012 tax software If you use 10% of your home for business, you can deduct 10% of the cost of the furnace repair. 2012 tax software   Repairs keep your home in good working order over its useful life. 2012 tax software Examples of common repairs are patching walls and floors, painting, wallpapering, repairing roofs and gutters, and mending leaks. 2012 tax software However, repairs are sometimes treated as a permanent improvement and are not deductible. 2012 tax software See Permanent improvements , later, under Depreciating Your Home. 2012 tax software Security system. 2012 tax software   If you install a security system that protects all the doors and windows in your home, you can deduct the business part of the expenses you incur to maintain and monitor the system. 2012 tax software You also can take a depreciation deduction for the part of the cost of the security system relating to the business use of your home. 2012 tax software Utilities and services. 2012 tax software   Expenses for utilities and services, such as electricity, gas, trash removal, and cleaning services, are primarily personal expenses. 2012 tax software However, if you use part of your home for business, you can deduct the business part of these expenses. 2012 tax software Generally, the business percentage for utilities is the same as the percentage of your home used for business. 2012 tax software Telephone. 2012 tax software   The basic local telephone service charge, including taxes, for the first telephone line into your home (i. 2012 tax software e. 2012 tax software , landline) is a nondeductible personal expense. 2012 tax software However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses. 2012 tax software Do not include these expenses as a cost of using your home for business. 2012 tax software Deduct these charges separately on the appropriate form or schedule. 2012 tax software For example, if you file Schedule C (Form 1040), deduct these expenses on line 25, Utilities (instead of line 30, Expenses for business use of your home). 2012 tax software Depreciating Your Home If you own your home and qualify to deduct expenses for its business use, you can claim a deduction for depreciation. 2012 tax software Depreciation is an allowance for the wear and tear on the part of your home used for business. 2012 tax software You cannot depreciate the cost or value of the land. 2012 tax software You recover its cost when you sell or otherwise dispose of the property. 2012 tax software Before you figure your depreciation deduction, you need to know the following information. 2012 tax software The month and year you started using your home for business. 2012 tax software The adjusted basis and fair market value of your home (excluding land) at the time you began using it for business. 2012 tax software The cost of any improvements before and after you began using the property for business. 2012 tax software The percentage of your home used for business. 2012 tax software See Business Percentage , later. 2012 tax software Adjusted basis defined. 2012 tax software   The adjusted basis of your home is generally its cost, plus the cost of any permanent improvements you made to it, minus any casualty losses or depreciation deducted in earlier tax years. 2012 tax software For a discussion of adjusted basis, see Publication 551. 2012 tax software Permanent improvements. 2012 tax software   A permanent improvement increases the value of property, adds to its life, or gives it a new or different use. 2012 tax software Examples of improvements are replacing electric wiring or plumbing, adding a new roof or addition, paneling, or remodeling. 2012 tax software    You must carefully distinguish between repairs and improvements. 2012 tax software See Repairs , earlier, under Actual Expenses. 2012 tax software You also must keep accurate records of these expenses. 2012 tax software These records will help you decide whether an expense is a deductible or a capital (added to the basis) expense. 2012 tax software However, if you make repairs as part of an extensive remodeling or restoration of your home, the entire job is an improvement. 2012 tax software Example. 2012 tax software You buy an older home and fix up two rooms as a beauty salon. 2012 tax software You patch the plaster on the ceilings and walls, paint, repair the floor, install an outside door, and install new wiring, plumbing, and other equipment. 2012 tax software Normally, the patching, painting, and floor work are repairs and the other expenses are permanent improvements. 2012 tax software However, because the work gives your property a new use, the entire remodeling job is a permanent improvement and its cost is added to the basis of the property. 2012 tax software You cannot deduct any portion of it as a repair expense. 2012 tax software Adjusting for depreciation deducted in earlier years. 2012 tax software   Decrease the basis of your property by the depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you properly selected. 2012 tax software If you deducted less depreciation than you could have under the method you selected, decrease the basis by the amount you could have deducted under that method. 2012 tax software If you did not deduct any depreciation, decrease the basis by the amount you could have deducted. 2012 tax software   If you deducted more depreciation than you should have, decrease your basis by the amount you should have deducted, plus the part of the excess depreciation you deducted that actually decreased your tax liability for any year. 2012 tax software   If you deducted the incorrect amount of depreciation, see Publication 946. 2012 tax software Fair market value defined. 2012 tax software   The fair market value of your home is the price at which the property would change hands between a buyer and a seller, neither having to buy or sell, and both having reasonable knowledge of all necessary facts. 2012 tax software Sales of similar property, on or about the date you begin using your home for business, may be helpful in determining the property's fair market value. 2012 tax software Figuring the depreciation deduction for the current year. 2012 tax software   If you began using your home for business before 2013, continue to use the same depreciation method you used in past tax years. 2012 tax software   If you began using your home for business for the first time in 2013, depreciate the business part as nonresidential real property under the modified accelerated cost recovery system (MACRS). 2012 tax software Under MACRS, nonresidential real property is depreciated using the straight line method over 39 years. 2012 tax software For more information on MACRS and other methods of depreciation, see Publication 946. 2012 tax software   To figure the depreciation deduction, you must first figure the part of the cost of your home that can be depreciated (depreciable basis). 2012 tax software The depreciable basis is figured by multiplying the percentage of your home used for business by the smaller of the following. 2012 tax software The adjusted basis of your home (excluding land) on the date you began using your home for business. 2012 tax software The fair market value of your home (excluding land) on the date you began using your home for business. 2012 tax software Depreciation table. 2012 tax software   If 2013 was the first year you used your home for business, you can figure your 2013 depreciation for the business part of your home by using the appropriate percentage from the following table. 2012 tax software Table 2. 2012 tax software MACRS Percentage Table for 39-Year Nonresidential Real Property Month First Used for Business Percentage To Use 1 2. 2012 tax software 461% 2 2. 2012 tax software 247% 3 2. 2012 tax software 033% 4 1. 2012 tax software 819% 5 1. 2012 tax software 605% 6 1. 2012 tax software 391% 7 1. 2012 tax software 177% 8 0. 2012 tax software 963% 9 0. 2012 tax software 749% 10 0. 2012 tax software 535% 11 0. 2012 tax software 321% 12 0. 2012 tax software 107%   Multiply the depreciable basis of the business part of your home by the percentage from the table for the first month you use your home for business. 2012 tax software See Publication 946 for the percentages for the remaining tax years of the recovery period. 2012 tax software Example. 2012 tax software In May, George Miller began to use one room in his home exclusively and regularly to meet clients. 2012 tax software This room is 8% of the square footage of his home. 2012 tax software He bought the home in 2003 for $125,000. 2012 tax software He determined from his property tax records that his adjusted basis in the house (exclusive of land) is $115,000. 2012 tax software In May, the house had a fair market value of $165,000. 2012 tax software He multiplies his adjusted basis of $115,000 (which is less than the fair market value) by 8%. 2012 tax software The result is $9,200, his depreciable basis for the business part of the house. 2012 tax software George files his return based on the calendar year. 2012 tax software May is the 5th month of his tax year. 2012 tax software He multiplies his depreciable basis of $9,200 by 1. 2012 tax software 605% (. 2012 tax software 01605), the percentage from the table for the 5th month. 2012 tax software His depreciation deduction is $147. 2012 tax software 66. 2012 tax software Depreciating permanent improvements. 2012 tax software   Add the costs of permanent improvements made before you began using your home for business to the basis of your property. 2012 tax software Depreciate these costs as part of the cost of your home as explained earlier. 2012 tax software The costs of improvements made after you begin using your home for business (that affect the business part of your home, such as a new roof) are depreciated separately. 2012 tax software Multiply the cost of the improvement by the business-use percentage and depreciate the result over the recovery period that would apply to your home if you began using it for business at the same time as the improvement. 2012 tax software For improvements made this year, the recovery period is 39 years. 2012 tax software For the percentage to use for the first year, see Table 2, earlier. 2012 tax software For more information on recovery periods, see Publication 946. 2012 tax software Business Percentage To find the business percentage, compare the size of the part of your home that you use for business to your whole house. 2012 tax software Use the resulting percentage to figure the business part of the expenses for operating your entire home. 2012 tax software You can use any reasonable method to determine the business percentage. 2012 tax software The following are two commonly used methods for figuring the percentage. 2012 tax software Divide the area (length multiplied by the width) used for business by the total area of your home. 2012 tax software If the rooms in your home are all about the same size, you can divide the number of rooms used for business by the total number of rooms in your home. 2012 tax software Example 1. 2012 tax software Your office is 240 square feet (12 feet × 20 feet). 2012 tax software Your home is 1,200 square feet. 2012 tax software Your office is 20% (240 ÷ 1,200) of the total area of your home. 2012 tax software Your business percentage is 20%. 2012 tax software Example 2. 2012 tax software You use one room in your home for business. 2012 tax software Your home has 10 rooms, all about equal size. 2012 tax software Your office is 10% (1 ÷ 10) of the total area of your home. 2012 tax software Your business percentage is 10%. 2012 tax software Use lines 1-7 of Form 8829, or lines 1-3 on the Worksheet To Figure the Deduction for Business Use of Your Home (near the end of this publication) to figure your business percentage. 2012 tax software Deduction Limit If your gross income from the business use of your home equals or exceeds your total business expenses (including depreciation), you can deduct all your business expenses related to the use of your home. 2012 tax software If your gross income from the business use of your home is less than your total business expenses, your deduction for certain expenses for the business use of your home is limited. 2012 tax software Your deduction of otherwise nondeductible expenses, such as insurance, utilities, and depreciation of your home (with depreciation of your home taken last), that are allocable to the business, is limited to the gross income from the business use of your home minus the sum of the following. 2012 tax software The business part of expenses you could deduct even if you did not use your home for business (such as mortgage interest, real estate taxes, and casualty and theft losses that are allowable as itemized deductions on Schedule A (Form 1040)). 2012 tax software These expenses are discussed in detail under Actual Expenses , earlier. 2012 tax software The business expenses that relate to the business activity in the home (for example, business phone, supplies, and depreciation on equipment), but not to the use of the home itself. 2012 tax software If you are self-employed, do not include in (2) above your deduction for one-half of your self-employment tax. 2012 tax software Carryover of unallowed expenses. 2012 tax software   If your deductions are greater than the current year's limit, you can carry over the excess to the next year in which you use actual expenses. 2012 tax software They are subject to the deduction limit for that year, whether or not you live in the same home during that year. 2012 tax software Figuring the deduction limit and carryover. 2012 tax software   If you are an employee or a partner, or you file Schedule F (Form 1040), use the Worksheet To Figure the Deduction for Business Use of Your Home, near the end of this publication. 2012 tax software If you file Schedule C (Form 1040), figure your deduction limit and carryover on Form 8829. 2012 tax software Example. 2012 tax software You meet the requirements for deducting expenses for the business use of your home. 2012 tax software You use 20% of your home for business. 2012 tax software In 2013, your business expenses and the expenses for the business use of your home are deducted from your gross income in the following order. 2012 tax software    Gross income from business $6,000 Minus:   Deductible mortgage interest and real estate taxes (20%) 3,000 Business expenses not related to the use of your home (100%) (business phone, supplies, and depreciation on equipment) 2,000 Deduction limit $1,000 Minus other expenses allocable to business use of home:   Maintenance, insurance, and utilities (20%) 800 Depreciation allowed (20% = $1,600 allowable, but subject to balance of deduction limit) 200 Other expenses up to the deduction limit $1,000 Depreciation carryover to 2014 ($1,600 − $200) (subject to deduction limit in 2014) $1,400   You can deduct all of the business part of your deductible mortgage interest and real estate taxes ($3,000). 2012 tax software You also can deduct all of your business expenses not related to the use of your home ($2,000). 2012 tax software Additionally, you can deduct all of the business part of your expenses for maintenance, insurance, and utilities, because the total ($800) is less than the $1,000 deduction limit. 2012 tax software Your deduction for depreciation for the business use of your home is limited to $200 ($1,000 minus $800) because of the deduction limit. 2012 tax software You can carry over the $1,400 balance and add it to your depreciation for 2014, subject to your deduction limit in 2014. 2012 tax software More than one place of business. 2012 tax software   If part of the gross income from your trade or business is from the business use of part of your home and part is from a place other than your home, you must determine the part of your gross income from the business use of your home before you figure the deduction limit. 2012 tax software In making this determination, consider the time you spend at each location, the business investment in each location, and any other relevant facts and circumstances. 2012 tax software If your home office qualifies as your principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business. 2012 tax software For more information on transportation costs, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. 2012 tax software Using the Simplified Method The simplified method is an alternative to the calculation, allocation, and substantiation of actual expenses. 2012 tax software In most cases, you will figure your deduction by multiplying $5, the prescribed rate, by the area of your home used for a qualified business use. 2012 tax software The area you use to figure your deduction is limited to 300 square feet. 2012 tax software See Simplified Amount , later, for information about figuring the amount of the deduction. 2012 tax software For more information about the simplified method, see Revenue Procedure 2013-13, 2013-06 I. 2012 tax software R. 2012 tax software B. 2012 tax software 478, available at www. 2012 tax software irs. 2012 tax software gov/irb/2013-06_IRB/ar09. 2012 tax software html. 2012 tax software Actual expenses and depreciation of your home. 2012 tax software   If you elect to use the simplified method, you cannot deduct any actual expenses for the business except for business expenses that are not related to the use of the home. 2012 tax software You also cannot deduct any depreciation (including any additional first-year depreciation) or section 179 expense for the portion of the home that is used for a qualified business use. 2012 tax software The depreciation deduction allowable for that portion of the home is deemed to be zero for a year you use the simplified method. 2012 tax software If you figure your deduction for business use of the home using actual expenses in a subsequent year, you will have to use the appropriate optional depreciation table for MACRS to figure your depreciation. 2012 tax software More information. 2012 tax software   For more information about claiming depreciation in a subsequent year, see Revenue Procedure 2013-13, 2013-06 I. 2012 tax software R. 2012 tax software B. 2012 tax software 478, available at www. 2012 tax software irs. 2012 tax software gov/irb/2013-06_IRB/ar09. 2012 tax software html. 2012 tax software See Publication 946 for the optional depreciation tables Although you cannot deduct any depreciation or section 179 expense for the portion of your home used for a qualified business use, you may still claim depreciation or the section 179 expense deduction on other assets used in the business (for example, furniture and equipment). 2012 tax software Expenses deductible without regard to business use. 2012 tax software   When using the simplified method, treat as personal expenses those business expenses related to the use of the home that are deductible without regard to whether there is a qualified business use of the home. 2012 tax software These expenses include mortgage interest, real estate taxes, and casualty losses, subject to any limitations. 2012 tax software See Where To Deduct , later. 2012 tax software If you also rent part of your home, you must still allocate these expenses between rental use and personal use (for this purpose, personal use includes business use reported using the simplified method). 2012 tax software No deduction of carryover of actual expenses. 2012 tax software   If you used actual expenses to figure your deduction for business use of the home in a prior year and your deduction was limited, you cannot deduct the disallowed amount carried over from the prior year during a year you figure your deduction using the simplified method. 2012 tax software Instead, you will continue to carry over the disallowed amount to the next year that you use actual expenses to figure your deduction. 2012 tax software Electing the Simplified Method You choose whether or not to figure your deduction using the simplified method each taxable year. 2012 tax software Make the election for a home by using the simplified method to figure the deduction for the qualified business use of that home on a timely filed, original federal income tax return. 2012 tax software An election for a taxable year, once made, is irrevocable. 2012 tax software A change from using the simplified method in one year to actual expenses in a succeeding taxable year, or vice-versa, is not a change in method of accounting and does not require the consent of the Commissioner. 2012 tax software Shared use. 2012 tax software   If you share your home with someone else who also uses the home in a business that qualifies for this deduction, each of you make your own election. 2012 tax software More than one qualified business use. 2012 tax software   If you conduct more than one business that qualifies for this deduction in your home, your election to use the simplified method applies to all your qualified business uses of that home. 2012 tax software More than one home. 2012 tax software   If you used more than one home during the year (for example, you moved during the year), you can elect to use the simplified method for only one of the homes. 2012 tax software You must figure the deduction for any other home using actual expenses. 2012 tax software Simplified Amount Your deduction for the qualified business use of a home is the sum of each amount you figure for a separate qualified business use of your home. 2012 tax software To figure your deduction for the business use of a home using the simplified method, you will need to know the following information for each qualified business use of the home. 2012 tax software The allowable area of your home used in conducting the business. 2012 tax software If you did not conduct the business for the entire year in the home or the area changed during the year, you will need to know the allowable area you used and the number of days you conducted the business for each month. 2012 tax software The gross income from the business use of your home. 2012 tax software The amount of the business expenses that are not related to the use of your home. 2012 tax software If the qualified business use is for a daycare facility that uses space in your home on a regular (but not exclusive) basis, you will also need to know the percentage of time that part of your home is used for daycare. 2012 tax software To figure the amount you can deduct for qualified business use of your home using the simplified method, follow these 3 steps. 2012 tax software Multiply the allowable area by $5 (or less than $5 if the qualified business use is for a daycare that uses space in your home on a regular, but not exclusive, basis). 2012 tax software See Allowable area and Space used regularly for daycare , later. 2012 tax software Subtract the expenses from the business that are not related to the use of the home from the gross income related to the business use of the home. 2012 tax software If these expenses are greater than the gross income from the business use of the home, then you cannot take a deduction for this business use of the home. 2012 tax software See Gross income limitation , later. 2012 tax software Take the smaller of the amounts from (1) and (2). 2012 tax software This is the amount you can deduct for this qualified business use of your home using the simplified method. 2012 tax software If you are an employee or a partner, or you use your home in your farming business and file Schedule F (Form 1040), you can use the Simplified Method Worksheet, near the end of this publication, to help you figure your deduction. 2012 tax software If you use your home in a trade or business and you file Schedule C (Form 1040), you will use the Simplified Method Worksheet in your Instructions for Schedule C to figure your deduction. 2012 tax software Allowable area. 2012 tax software   In most cases, the allowable area is the smaller of the actual area (in square feet) of your home used in conducting the business and 300 square feet. 2012 tax software Your allowable area may be smaller if you conducted the business as a qualified joint venture with your spouse, the area used by the business was shared with another qualified business use, you used the home for the business for only part of the year, or the area used by the business changed during the year. 2012 tax software You can use the Area Adjustment Worksheet (for simplified method), near the end of this publication, to help you figure your allowable area for a qualified business use. 2012 tax software Area used by a qualified joint venture. 2012 tax software   If the qualified business use of the home is also a qualified joint venture, you and your spouse will figure the deduction for the business use separately. 2012 tax software Split the actual area used in conducting business between you and your spouse in the same manner you split your other tax attributes. 2012 tax software Then, each spouse will figure the allowable area separately. 2012 tax software For more information about qualified joint ventures, see Qualified Joint Venture in the Instructions for Schedule C. 2012 tax software Shared use. 2012 tax software   If you share your home with someone else who uses the home to conduct business that also qualifies for this deduction, you may not include the same square feet to figure your deduction as the other person. 2012 tax software You must allocate the shared space between you and the other person in a reasonable manner. 2012 tax software Example. 2012 tax software Kristin and Lindsey are roommates. 2012 tax software Kristin uses 300 square feet of their home for a qualified business use. 2012 tax software Lindsey uses 200 square feet of their home for a separate qualified business use. 2012 tax software The qualified business uses share 100 square feet. 2012 tax software In addition to the portion that they do not share, Kristin and Lindsey can both claim 50 of the 100 square feet or divide the 100 square feet between them in any reasonable manner. 2012 tax software If divided evenly, Kristin could claim 250 square feet using the simplified method and Lindsey could claim 150 square feet. 2012 tax software More than one qualified business use. 2012 tax software   If you conduct more than one business qualifying for the deduction, you are limited to a maximum of 300 square feet for all of the businesses. 2012 tax software Allocate the actual square footage used (up to the maximum of 300 square feet) among your qualified business uses in a reasonable manner. 2012 tax software However, do not allocate more square feet to a qualified business use than you actually use for that business. 2012 tax software Rental use. 2012 tax software   The simplified method does not apply to rental use. 2012 tax software A rental use that qualifies for the deduction must be figured using actual expenses. 2012 tax software If the rental use and a qualified business use share the same area, you will have to allocate the actual area used between the two uses. 2012 tax software You cannot use the same area to figure a deduction for the qualified business use as you are using to figure the deduction for the rental use. 2012 tax software Part-year use or area changes. 2012 tax software   If your qualified business use was for a portion of the taxable year (for example, a seasonal business or a business that begins during the taxable year) or you changed the square footage of your qualified business use, your deduction is limited to the average monthly allowable square footage. 2012 tax software You calculate the average monthly allowable square footage by adding the amount of allowable square feet you used in each month and dividing the sum by 12. 2012 tax software When determining the average monthly allowable square footage, you cannot take more than 300 square feet into account for any one month. 2012 tax software Additionally, if your qualified business use was less than 15 days in a month, you must use -0- for that month. 2012 tax software Example 1. 2012 tax software Andy files his federal income tax return on a calendar year basis. 2012 tax software On July 20, he began using 420 square feet of his home for a qualified business use. 2012 tax software He continued to use the 420 square feet until the end of the year. 2012 tax software His average monthly allowable square footage is 125 square feet, which is figured using 300 square feet for each month August through December divided by the number of months in the taxable year ((0 + 0 + 0 + 0 + 0 + 0 + 0 + 300 + 300 + 300 + 300 + 300)/12). 2012 tax software Example 2. 2012 tax software Amy files her federal income tax return on a calendar year basis. 2012 tax software On April 20, she began using 100 square feet of her home for a qualified business use. 2012 tax software On August 5, she expanded the area of her qualified use to 330 square feet. 2012 tax software Amy continued to use the 330 square feet until the end of the year. 2012 tax software Her average monthly allowable square footage is 150 square feet, which is figured using 100 square feet for May through July and 300 square feet for August through December divided by the number of months in the taxable year ((0 + 0 + 0 + 0 + 100 + 100 +100 + 300 + 300 + 300 + 300 + 300)/12). 2012 tax software Gross income limitation. 2012 tax software   Your deduction for business use of the home is limited to an amount equal to the gross income derived from the qualified business use of the home reduced by the business deductions that are unrelated to the use of your home. 2012 tax software If the business deductions that are unrelated to the use of your home are greater than the gross income derived from the qualified business use of your home, then you cannot take a deduction for this qualified business use of your home. 2012 tax software Business expenses not related to use of the home. 2012 tax software   These expenses relate to the business activity in the home, but not to the use of the home itself. 2012 tax software You can still deduct business expenses that are unrelated to the use of the home. 2012 tax software See Where To Deduct , later. 2012 tax software Examples of business expenses that are unrelated to the use of the home are advertising, wages, supplies, dues, and depreciation for equipment. 2012 tax software Space used regularly for daycare. 2012 tax software   If you do not use the area of your home exclusively for daycare, you must reduce the prescribed rate (maximum $5 per square foot) before figuring your deduction. 2012 tax software The reduced rate will equal the prescribed rate times a fraction. 2012 tax software The numerator of the fraction is the number of hours that the space was used during the year for daycare and the denominator is the total number of hours during the year that the space was available for all uses. 2012 tax software You can use the Daycare Facility Worksheet (for simplified method), near the end of this publication, to help you figure the reduced rate. 2012 tax software    If you used at least 300 square feet for daycare regularly and exclusively during the year, then you do not need to reduce the prescribed rate or complete the Daycare Facility Worksheet. 2012 tax software Daycare Facility If you use space in your home on a regular basis for providing daycare, you may be able to claim a deduction for that part of your home even if you use the same space for nonbusiness purposes. 2012 tax software To qualify for this exception to the exclusive use rule, you must meet both of the following requirements. 2012 tax software You must be in the trade or business of providing daycare for children, persons age 65 or older, or persons who are physically or mentally unable to care for themselves. 2012 tax software You must have applied for, been granted, or be exempt from having, a license, certification, registration, or approval as a daycare center or as a family or group daycare home under state law. 2012 tax software You do not meet this requirement if your application was rejected or your license or other authorization was revoked. 2012 tax software Figuring the deduction. 2012 tax software   If you elect to use the simplified method for your home, figure your deduction as described earlier in Using the Simplified Method under Figuring the Deduction. 2012 tax software    If you are figuring your deduction using actual expenses and you regularly use part of your home for daycare, figure what part is used for daycare, as explained in Business Percentage , earlier, under Figuring the Deduction. 2012 tax software If you also use that part exclusively for daycare, deduct all the allocable expenses, subject to the deduction limit, as explained earlier. 2012 tax software   If the use of part of your home as a daycare facility is regular, but not exclusive, you must figure the percentage of time that part of your home is used for daycare. 2012 tax software A room that is available for use throughout each business day and that you regularly use in your business is considered to be used for daycare throughout each business day. 2012 tax software You do not have to keep records to show the specific hours the area was used for business. 2012 tax software You can use the area occasionally for personal reasons. 2012 tax software However, a room you use only occasionally for business does not qualify for the deduction. 2012 tax software To find the percentage of time you actually use your home for business, compare the total time used for business to the total time that part of your home can be used for all purposes. 2012 tax software You can compare the hours of business use in a week with the number of hours in a week (168). 2012 tax software Or you can compare the hours of business use for the year with the number of hours in the year (8,760 in 2013). 2012 tax software If you started or stopped using your home for daycare in 2013, you must prorate the number of hours based on the number of days the home was available for daycare. 2012 tax software Example 1. 2012 tax software Mary Lake used her basement to operate a daycare business for children. 2012 tax software She figures the business percentage of the basement as follows. 2012 tax software Square footage of the basement Square footage of her home = 1,600 3,200 = 50%           She used the basement for daycare an average of 12 hours a day, 5 days a week, for 50 weeks a year. 2012 tax software During the other 12 hours a day, the family could use the basement. 2012 tax software She figures the percentage of time the basement was used for daycare as follows. 2012 tax software Number of hours used for daycare (12 x 5 x 50) Total number of hours in the year (24 x 365) = 3,000 8,760 = 34. 2012 tax software 25%           Mary can deduct 34. 2012 tax software 25% of any direct expenses for the basement. 2012 tax software However, because her indirect expenses are for the entire house, she can deduct only 17. 2012 tax software 13% of the indirect expenses. 2012 tax software She figures the percentage for her indirect expenses as follows. 2012 tax software Business percentage of the basement 50% Multiplied by: Percentage of time used for daycare × 34. 2012 tax software 25% Percentage for indirect expenses 17. 2012 tax software 13% Mary completes Form 8829, Part I, figuring the percentage of her home used for business, including the percentage of time the basement was used. 2012 tax software In Part II, Mary figures her deductible expenses. 2012 tax software She uses the following information to complete Part II. 2012 tax software Gross income from her daycare business $50,000 Expenses not related to the business use of the home $25,000 Tentative profit $25,000 Rent $8,400 Utilities $850 Painting the basement $500 Mary enters her tentative profit, $25,000, on line 8. 2012 tax software (This figure is the same as the amount on line 29 of her Schedule C (Form 1040). 2012 tax software ) The expenses she paid for rent and utilities relate to her entire home. 2012 tax software Therefore, she enters the amount paid for rent on line 18, column (b), and the amount paid for utilities on line 20, column (b). 2012 tax software She shows the total of these expenses on line 22, column (b). 2012 tax software For line 23, she multiplies the amount on line 22, column (b) by the percentage on line 7 and enters the result, $1,585. 2012 tax software Mary paid $500 to have the basement painted. 2012 tax software The painting is a direct expense. 2012 tax software However, because she did not use the basement exclusively for daycare, she must multiply $500 by the percentage of time the basement was used for daycare (34. 2012 tax software 25% – line 6). 2012 tax software She enters $171 (34. 2012 tax software 25% × $500) on line 19, column (a). 2012 tax software She adds line 22, column (a), and line 23 and enters $1,756 ($171 + $1,585) on line 25. 2012 tax software This is less than her deduction limit (line 15), so she can deduct the entire amount. 2012 tax software She follows the instructions to complete the rest of Part II and enters $1,756 on lines 33 and 35. 2012 tax software She then carries the $1,756 to line 30 of her Schedule C (Form 1040). 2012 tax software Example 2. 2012 tax software Assume the same facts as in Example 1 except that Mary also has another room that was available each business day for children to take naps in. 2012 tax software Although she did not keep a record of the number of hours the room was actually used for naps, it was used for part of each business day. 2012 tax software Since the room was available for business use during regular operating hours each business day and was used regularly in the business, it is considered used for daycare throughout each business day. 2012 tax software The basement and room are 60% of the total area of her home. 2012 tax software In figuring her expenses, 34. 2012 tax software 25% of any direct expenses for the basement and room are deductible. 2012 tax software In addition, 20. 2012 tax software 55% (34. 2012 tax software 25% × 60%) of her indirect expenses are deductible. 2012 tax software Example 3. 2012 tax software Assume the same facts as in Example 1 except that Mary stopped using her home for a daycare facility on June 24, 2013. 2012 tax software She used the basement for daycare an average of 12 hours a day, 5 days a week, but for only 25 weeks of the year. 2012 tax software During the other 12 hours a day, the family could still use the basement. 2012 tax software She figures the percentage of time the basement was used for business as follows. 2012 tax software Number of hours used for daycare (12 x 5 x 25) Total number of hours during period used (24 x 175) = 1,500 4,200 = 35. 2012 tax software 71%           Mary can deduct 35. 2012 tax software 71% of any direct expenses for the basement. 2012 tax software However, because her indirect expenses are for the entire house, she can deduct only 17. 2012 tax software 86% of the indirect expenses. 2012 tax software She figures the percentage for her indirect expenses as follows. 2012 tax software Business percentage of the basement 50% Multiplied by: Percentage of time used for daycare × 35. 2012 tax software 71% Percentage for indirect expenses 17. 2012 tax software 86% Meals. 2012 tax software   If you provide food for your daycare recipients, do not include the expense as a cost of using your home for business. 2012 tax software Claim it as a separate deduction on your Schedule C (Form 1040). 2012 tax software You can never deduct the cost of food consumed by you or your family. 2012 tax software You can deduct as a business expense 100% of the actual cost of food consumed by your daycare recipients (see Standard meal and snack rates , later, for an optional method for eligible children) and generally only 50% of the cost of food consumed by your employees. 2012 tax software However, you can deduct 100% of the cost of food consumed by your employees if its value can be excluded from their wages as a de minimis fringe benefit. 2012 tax software For more information on meals that meet these requirements, see Meals in chapter 2 of Publication 15-B, Employer's Tax Guide to Fringe Benefits. 2012 tax software   If you deduct the actual cost of food for your daycare business, keep a separate record (with receipts) of your family's food costs. 2012 tax software   Reimbursements you receive from a sponsor under the Child and Adult Care Food Program of the Department of Agriculture are taxable only to the extent they exceed your expenses for food for eligible children. 2012 tax software If your reimbursements are more than your expenses for food, show the difference as income in Part I of Schedule C (Form 1040). 2012 tax software If your food expenses are greater than the reimbursements, show the difference as an expense in Part V of Schedule C (Form 1040). 2012 tax software Do not include payments or expenses for your own children if they are eligible for the program. 2012 tax software Follow this procedure even if you receive a Form 1099-MISC, Miscellaneous Income, reporting a payment from the sponsor. 2012 tax software Standard meal and snack rates. 2012 tax software   If you qualify as a family daycare provider, you can use the standard meal and snack rates, instead of actual costs, to compute the deductible cost of meals and snacks provided to eligible children. 2012 tax software For these purposes: A family daycare provider is a person engaged in the business of providing family daycare. 2012 tax software Family daycare is childcare provided to eligible children in the home of the family daycare provider. 2012 tax software The care must be non-medical, not involve a transfer of legal custody, and generally last less than 24 hours each day. 2012 tax software Eligible children are minor children receiving family daycare in the home of the family daycare provider. 2012 tax software Eligible children do not include children who are full-time or part-time residents in the home where the childcare is provided or children whose parents or guardians are residents of the same home. 2012 tax software Eligible children do not include children who receive daycare services for personal reasons of the provider. 2012 tax software For example, if a provider provides daycare services for a relative as a favor to that relative, that child is not an eligible child. 2012 tax software   You can compute the deductible cost of each meal and snack you actually purchased and served to an eligible child during the time period you provided family daycare using the standard meal and snack rates shown in Table 3, later. 2012 tax software You can use the standard meal and snack rates for a maximum of one breakfast, one lunch, one dinner, and three snacks per eligible child per day. 2012 tax software If you receive reimbursement for a particular meal or snack, you can deduct only the portion of the applicable standard meal or snack rate that is more than the amount of the reimbursement. 2012 tax software   You can use either the standard meal and snack rates or actual costs to calculate the deductible cost of food provided to eligible children in the family daycare for any particular tax year. 2012 tax software If you choose to use the standard meal and snack rates for a particular tax year, you must use the rates for all your deductible food costs for eligible children during that tax year. 2012 tax software However, if you use the standard meal and snack rates in any tax year, you can use actual costs to compute the deductible cost of food in any other tax year. 2012 tax software   If you use the standard meal and snack rates, you must maintain records to substantiate the computation of the total amount deducted for the cost of food provided to eligible children. 2012 tax software The records kept should include the name of each child, dates and hours of attendance in the daycare, and the type and quantity of meals and snacks served. 2012 tax software This information can be recorded in a log similar to the one shown in Exhibit A, near the end of this publication. 2012 tax software   The standard meal and snack rates include beverages, but do not include non-food supplies used for food preparation, service, or storage, such as containers, paper products, or utensils. 2012 tax software These expenses can be claimed as a separate deduction on your Schedule C (Form 1040). 2012 tax software     Table 3. 2012 tax software Standard Meal and Snack Rates1 Location of Family Daycare Provider Breakfast Lunch Dinner Snack States other than Alaska an