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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have a marketing consulting business. Its been in business

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I have a marketing consulting business. It's been in business since 2009. Historically, I've done all my work from home (well, most of it) since 2009. I've been able to write off a portion of my home expenses as my office is dedicated to the business.

Now I am looking at renting a desk in a "cowork" environment. This is a local building where you can pay a flat monthly fee to rent a desk. I'd estimate that 50% of my work will be done there each year and 50% of it will be done at my residence.

Question: Will I still be able to write off any portion of my home office come tax time?

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

In order to deduct the home office deduction, your home office must be your "principal place of business"

MyVirtualCPA :

So, if you have another office that you rent, that would be your "principal place of business" and you would be deducting the expenses for that office.

MyVirtualCPA :

You cannot deduct both.

Customer:

Thanks. What if I end up doing "most" (51+%) of my work at home and less at the co-work location? Does that change things?

Customer:

Ah Ok. So it's one or the other....not a % of both?

MyVirtualCPA :

It has to be your principal place of business, You could not have both

MyVirtualCPA :

Only one place can be your principal place of business

Customer:

Ok, thank you.

MyVirtualCPA :

You're welcome.

MyVirtualCPA :

Can I assist you with anything additional?

Customer:

No, thanks.

MyVirtualCPA :

If not, please rate my response as "excellent" so that I may receive credit for assisting you today

Megan C and other Tax Specialists are ready to help you
Chris,

I did some more digging, and the IRS states:
"You must show that you use your home as your principal place of business. If you conduct business at a location outside of your home, but also use your home substantially and regularly to conduct business, you may qualify for a home office deduction. For example, if you have in-person meetings with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business. You can deduct expenses for a separate free-standing structure, such as a studio, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or the only place where you meet patients, clients, or customers."

So, you can deduct your home office and your regular office if you are using them both in the course of your business.

Thanks. Sorry about any confusion.

Reference: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Home-Office-Deduction

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