Next, he figures his deduction for operating expenses. He paid $300 to have his office repainted. He enters this amount on line 18, column (a) because it is a direct expense. All his other expenses ($400 homeowner's insurance, $1,400 roof repairs, and $1,800 gas and electric) relate to his entire home. Therefore, he enters them in column (b) on the appropriate lines. He adds the $300 direct expenses (line 21, column (a)) to the $360 total for indirect expenses (line 22) and enters the total, $660, on line 24. This amount is less than his deduction limit, so he can deduct it in full. The $24,342 balance of his deduction limit (line 26) is the most he can deduct for depreciation.
Form 4562 Example
Form 4562, Part I, lines 1-13
Form 4562, Part III, line 19c
Form 4562, Part III, line 19i
Form 4562, Part IV, line 22
Schedule C Example
Schedule C, Line 13
Schedule C, Line 16b
Schedule C, Line 25
Schedule C, Lines 28-30
Form 8829 Example
Form 8829, Part II, Step 1
Form 8829, Part II, Step 2
Form 8829, Part II, Step 3
Form 8829, Part II, Step 4
Information courtesy of the Internal Revenue Service.
