Found this in the instructions when I was looking for my answers SM
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Posted By: SE too from below on February 07, 2005 at 21:07:00:
In Reply to: Tax question about SE/employee statuses/SM posted by Puzzled MT on February 07, 2005 at 18:54:02:
"If you did not operate a business for the entire year, you can deduct only the expenses paid or incurred for the portion of the year you used your home for business." So I guess you'd figure out your expenses for the months you were an SE only. The only place I see you might run into problems is where I did, and that is the electricity thing. You can only deduct as a "direct expense" (that pertaining only to your office space, not benefiting any other part of the household) your estimate of how much of your utility bill was used in your office space only. You cannot claim as an "indirect expense" (those things that benefit other parts of the house also) any part of your electric bill. This means that you have to figure out what part of your electricity expense benefits your office only and put that as a direct expense for the amount of months you were an SE. Hope this helped a little... it's hard... they should make this easier.
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