SE Housing expense

Use this calculation when client chooses a percentage of housing expenses as a self-employment cost of doing business, and the balance as a household deduction:

1. Use verification of current housing expenses. Note: This applies to rent/mortgage, insurance, taxes, etc. This does not apply to utilities.
2. Multiply the amount of the housing expenses times the percentage from Line 7, Form 8829, to arrive at a monthly cost. Multiply the monthly cost by 12 to arrive at a yearly allowable self-employment cost of doing business.

3. To calculate the remaining monthly household deduction, subtract the monthly amount (from #2 above the original calculation) from the full rent amount to arrive at the allowable monthly housing deduction. :

   Example: Linda pays rent of $500 and she chooses to use part of the expense as a cost of doing business. The 8829 verifies the household is used 46.83% of the time for the business.

From the "Self-Employment Income Guide for Food Stamp Households" found in the FSP Best Practices Log.

(05-2005)