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Business expenses in excess of business income can't be deducted the same year but can be "carried forward" and deducted in future years. However, based on a plain reading of rules regarding the home office deduction, it seems that the home office deduction is hard-capped at income minus other expenses that year. Can home office expenses in excess of that cap be carried forward and deducted in future years?

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  • Where are these rules that you're plain reading? Can you quote what it is you're referring to?
    – littleadv
    Feb 8 at 19:18

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Under the regular method for computing the deduction, you may be able to carry forward some of these business expenses to the next year, subject to the gross income limitation for that year. There's no carryover provision under the safe harbor method, but you may elect into and out of the safe harbor method in any given year.

[emphasis added]. Looks like you should use the regular method if interested in carrying forward to future years.

https://www.irs.gov/taxtopics/tc509

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