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Daycare and Taxes>New Safe Harbor rule
zorrambo 02:19 PM 03-25-2014
I would like to know how to apply the Safe Harbor rule. I believe I qualify for this because my expenses for the business use of my home on Schedule C came to $814. Do I still need to fill out 8829 and Schedule C? Is there any reason I would not want to apply the Safe Harbor rule?

Thank you.
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TomCopeland 02:39 PM 03-25-2014
Originally Posted by zorrambo:
I would like to know how to apply the Safe Harbor rule. I believe I qualify for this because my expenses for the business use of my home on Schedule C came to $814. Do I still need to fill out 8829 and Schedule C? Is there any reason I would not want to apply the Safe Harbor rule?

Thank you.
Before you use the safe harbor rule, remember to multiply $5 by your Time % and then multiply the total by 300 square feet. If the result is more than $814, then go ahead and use it. If not, stick with Form 8829. If you use the safe harbor rule, do not file Form 8829. When counting expenses on Form 8829 did you include house depreciation (or house rent)?
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zorrambo 02:57 PM 03-26-2014
Originally Posted by TomCopeland:
Before you use the safe harbor rule, remember to multiply $5 by your Time % and then multiply the total by 300 square feet. If the result is more than $814, then go ahead and use it. If not, stick with Form 8829. If you use the safe harbor rule, do not file Form 8829. When counting expenses on Form 8829 did you include house depreciation (or house rent)?
I only provided daycare for 280 hours last year and spent very little related to the business. My TS% is 8%. Multiplied by $5 and 300 equals 120. That seems low. Is $120 what Safe Harbor would get me? Does that mean I am better off going with an 8829?
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TomCopeland 04:50 PM 03-26-2014
Originally Posted by zorrambo:
I only provided daycare for 280 hours last year and spent very little related to the business. My TS% is 8%. Multiplied by $5 and 300 equals 120. That seems low. Is $120 what Safe Harbor would get me? Does that mean I am better off going with an 8829?
You are correct. You would only get a $120 deduction using the safe harbor rule. So, I'm sure you will be better off using Form 8829 where you will likely be able to deduct more than $120!
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zorrambo 02:19 PM 03-27-2014
Your assistance is greatly appreciated. Thank you.
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Tags:8829, business use of home, safe harbor, schedule c
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