Business Use of Home - Taxes and Interest

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When claiming expenses for the business use of home, the treatment of deductible mortgage interest and real estate taxes differs between self-employed persons and employees.

Self-employed Persons: For self-employed persons, the business portion of deductible home mortgage interest and real estate taxes is figured on Form 8829 and deducted on the business use of home line on the Schedule C or Schedule F. The remaining non-business portion of deductible mortgage interest and real estate taxes are deducted on Schedule A (lines 10 or 11, and line 6).

Employees: For employees, although you generally deduct expenses for the business use of your home on Schedule A, line 20, do not include any deductible home mortgage interest on that line. Instead, deduct both the business and nonbusiness parts of this interest on line 10 or 11 of Schedule A. Deduct both the business and nonbusiness parts of your real estate taxes on line 6 of Schedule A.

Source: IRS Publication 587

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