Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

I am paid rent for an office space in my home from my company.

Customer Question
How much of the rent...
I am paid rent for an office space in my home from my company. How much of the rent can I expense out?
Submitted: 9 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 2 minutes by:
9/2/2008
Tax Professional: jgordosea, Enrolled Agent replied 9 years ago
jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3,161
Experience: I've prepared all types of taxes since 1987.
Verified

Greetings,

 

Are you an employee of the company?

 

Do you have any ownership (shareholder, partner,etc.) and if so what is it?

 

Thanks for the additonal information.

Ask Your Own Tax Question
Customer reply replied 9 years ago
I am the only full time employee from my nonprofit. I am president. They give me $1300 per month for office space. I have one room dedicated to only office and another large storage area
Customer reply replied 9 years ago
I don't see where to click "accept for payment
Customer reply replied 9 years ago
I don't see where to click "accept for payment

Tax Professional: jgordosea, Enrolled Agent replied 9 years ago

Greetings,

 

There is a code section that disallows, in general, deductions by an employee for any office rental of their dwelling unit.

 

Sec. 280(A)(c)(6) provides that:
Treatment of rental to employer. Paragraphs [c](1) and [c](3) shall not apply to any item which is attributable to the rental of the dwelling unit (or any portion thereof) by the taxpayer to his employer during any period in which the taxpayer uses the dwelling unit (or portion) in performing services as an employee of the employer

 

Congress added Sec. 280A(c)(6) expressly to overturn the Tax Court's decision in Feldman, 84 TC 1 (1985), aff'd, 791 F2d 781 (9th Cir. 1986). In enacting Sec. 280(A)(c)(6), Congress observed that the Tax Court's interpretation of Sec. 280A in Feldman could lead to the circumvention of statutory restrictions on the deduction of home-office expenses. In particular, Congress was concerned that (1) employers and employees could arrange sham transactions (by which a portion of salary was paid in the form of rent) and (2) the employer-employee transactions would not be negotiated at arm's length, but would provide added tax deductions for the employee at no additional cost to the employer. Accordingly, Congress provided that no home-office deductions were allowable (other than expenses such as home mortgage interest and real estate taxes that are deductible absent business use) if an employee rents a portion of his home to his employer

 

This section bars you from deducting what would otherwise be deductible trade or business expenses.

 

The bad news is that you may not deduct any expenses for rental payments (unless it is for a separate structure). The work around would be for the company to reimburse you; and you would not have to include the reimbursement in your income if done under an accountable plan.

 

See Rentals to an employer. for more discussion and IRS Provides Guidance on Employee Rental of Home to Employer for the IRS Letter Ruling (TAM)NNN-NN-NNNN/em>

 

I hope this helps even though it is very likely not the answer you wanted to hear.

 

Best wishes.

 

jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3,161
Experience: I've prepared all types of taxes since 1987.
Verified
jgordosea and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 9 years ago
"The work around would be for the company to reimburse you; and you would not have to include the reimbursement in your income if done under an accountable plan."

currently I get a paycheck from my company and Paychex includes the rent of my home office.

What makes an "accountable plan"?
Tax Professional: jgordosea, Enrolled Agent replied 9 years ago

Hello again,

 

Is the rent subject to FICA and Medicare on your check or not ?

 

Is the FICA 6.2% of the amount including the rent or only of the other compensation?

 

Is the Medicare 1.45% of the amount including the rent or only of the other compensation?

Ask Your Own Tax Question
Tax Professional: jgordosea, Enrolled Agent replied 9 years ago

Hello again,

 

To be an "accountable plan", the reimbursement program must have these characteristics:

  • Business connection of expenses;
  • Proper substantiation of expenses;
  • Written plan requiring that employees return to the employer reimbursed amounts in excess of actual expenses incurred;
  • The actual return by employees, within a reasonable time, of reimbursed amounts in excess of actual expenses incurred; and
  • Any advance made by an employer to an employee must be reasonably calculated and must not be expected to exceed the amount of reasonably anticipated expenditures to which such advance relates.

The Accountable Plan requirements are located at Internal Revenue Code Sec. 62(c) and IRS regulations 1.62-2.

 

The result of not meeting the requirements of an accountable plan is that the money that is paid to the employee is taxable compensation to the employee.

 

See Accountable Plans on irs.gov for more details.

 

I hope this helps.

Ask Your Own Tax Question
Ask jgordosea Your Own Question
jgordosea
jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3,161
3,161 Satisfied Customers
Experience: I've prepared all types of taxes since 1987.

jgordosea is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,338 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,980 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

3,161 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
20% tax deduction for pass through entities is limited for
Hi there. 20% tax deduction for pass through entities is limited for service providers like doctors. My question is: An S-Corporation provide medical billing services like sending claim, collecting mo… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,067 satisfied customers
As per the new tax law, the property tax deductions of 10000
As per the new tax law, the property tax deductions of 10000 is it per property or per tax payer per property?If both wife and husband file together can they claim 20000 towards one property or just 1… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
In 2018 I had a medicare deduction ($134) taken from my
In 2018 I had a medicare deduction ($134) taken from my monthly deduction ($1971.00 less $134.00 ) but nothing was taken for Part D (drug plan). Last year they took $13.30 per month. Why didn't they t… read more
Mark D
Mark D
Enrolled Agent
Master's Degree
1,300 satisfied customers
Who can deduct 529 contributions. Can grandparents deduct
Who can deduct 529 contributions JA: The Accountant will know how to help. Please tell me more, so we can help you best. Customer: Can grandparents deduct 529 contributions JA: Is there anything else … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
On this new tax bill, if you pay real estate taxes and are
On this new tax bill, if you pay real estate taxes and are limited to deducting 10K would you still get that deduction AND the 24K standard deduction since all other itemized deductions (except mortga… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
Will there be any changes in the payroll deductions for
Will there be any changes in the payroll deductions for 2018? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
This is an income tax question. I am thinking of Deducting
This is an income tax question. I am thinking of Deducting next years giving to church this year with pending changes to tax law. As I recall, higher income levels reduce schedule allowable deductions… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Form 886-A Deductible Home Mortgage Interest Taxpayer has
Form 886-A Deductible Home Mortgage Interest Taxpayer has $1,000,000 in Grandfathered debt. Line 9 Form 886-A - is this line amount after deducting the garandfathered debt… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Dose mean can not deduct state income taxes only or dose it
dose mean can not deduct state income taxes only or dose it includes property taxes too … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Is the house or taxes deductible for him. How does it affect
Is the house or taxes deductible for him. How does it affect his taxes. How can the house be in both our names, without making me an equal partner.… read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
63 satisfied customers
Form 1120, cash basis. If Taxes paid to IRS are deductible,
Form 1120, cash basis. If Taxes paid to IRS are deductible, are refunds for overpayment the equivalent of income?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,067 satisfied customers
Is "Medicare Part" premiums deductable if so where do I find
Is "Medicare Part B" premiums deductable if so where do I find the proper question in Turbotax? I used Turbotax… read more
Wallstreet Esq.
Wallstreet Esq.
Tax Attorney
Doctoral Degree
586 satisfied customers
You may recall that tax deductions are only deductible by
You may recall that tax deductions are only deductible by the legislative grace of Congress. After this lesson, you might have realized that Congress was pretty generous with the types of business exp… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
I have a income and my real estate taxes on my home doesn't
I have a income and my real estate taxes on my home doesn't not seem to affect the amount I owe in taxes on the 1040 , what is the reason for this?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
Can house maintenance and property taxes be deducted on form
Hello. Can house maintenance and property taxes be deducted on form 1041 for a house owned by decedent prior to the Executors selling it? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
My question is about tax deductions (Mortgage Interest.
My question is about tax deductions (Mortgage Interest. Mortgage Insurance premium & Real Estate Taxes) that can be deducted by two, unrelated people, who own a house together.The two unrelated owners… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Can I deduct real estate taxes on the Federal tax form,
Can I deduct real estate taxes on the Federal tax form, which I paid on land I own that is not my first or second home? … read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,338 satisfied customers
Can you still deduct mortgage interest and real estate taxes
Can you still deduct mortgage interest and real estate taxes payments? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x