Originally Posted by frugalmama4:
I can't wait to see what Tom says on this subject.
I'm totally confused here. 
Would the way your expenses are claim have something to do with whomever is filing as "head of household"?
I thought you we're allowed to itemized deductions (mortgage interest, real estate taxes, medical etc) rather or not you have a business??? and if its more then the "standard deduction" it's best to do so.
However, when you add in the fact that you are self employed and use your home for business then you can also take a portion of the (mortgage interest etc) based on your T/S% against your gross business income...right?
Oh this is more then I can handle...I need a personal accountant
Family child care providers must allocate their property tax and mortgage interest between IRS Form 8829 and Schedule A (itemize). List your total of these expenses on Form 8829 and then multiply them by your time-space % to get the amount you can claim on Form 8829. The difference you claim on Schedule A. So, if your expenses for these two items were $10,000 and your time-space % was 40% you would claim $4,000 on Form 8829 and $6,000 on Schedule A. You must split these expenses in this manner.
If your business expenses exceed your income, then you can't claim house expenses on Form 8829. Instead, you roll them over to the next year.
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