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I have a w2 job but i also run 2 businesses. One is an IT…

I have a w2 job...
I have a w2 job but i also run 2 businesses. One is an IT company in which myself and a few partners do our work in my apartment each day. I have a dedicated room for this work, we're doing work basically 8am to 10pm. I'm interested in knowing the best way to write off the portion of rent on my tax return. Would i do this on the business return or on my personal return? And how? Any information would be greatly appreciated.
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Answered in 10 minutes by:
3/8/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,142
Experience: Taxes, Immigration, Labor Relations
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There are two options - and you may select either

Simplified Option. If you use the simplified option, you multiply the allowable square footage of your office by a rate of $5. The maximum footage allowed is 300 square feet. This option will save you time because it simplifies how you figure and claim the deduction. It will also make it easier for you to keep records.

Regular Method. If you use the regular method, the home office deduction includes certain costs that you paid for your home. For example, if you rent your home, part of the rent you paid may qualify. If you own your home, part of the mortgage interest, taxes and utilities you paid may qualify. The amount you can deduct usually depends on the percentage of your home used for business.

If you are self-employed and choose the regular method, use Form 8829, Expenses for Business Use of Your Home, to figure the amount you can deduct. You can claim your deduction using either method on Schedule C, Profit or Loss From Business.

For more on this topic, see Publication 587, Business Use of Your Home.

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Customer reply replied 4 months ago
Thank you Lev. So either way I execute a write off on my personal filing not on the business side prior to generating k1s.

The above is assumed you are running a business as a solo proprietorship - or have a single member LLC treated as disregarded entity.

If you have a separate business entity - in which you a partner OR an employee - you will need to submit your expense report to your business entity and will be reimbursed under an accountable reimbursement plan.

That expense report will include expenses for business use of you home - either method may be used.

Then - your business entity will deduct such expenses.

Only business portion of your home is deductible .

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Customer reply replied 4 months ago
Thank you.

I appreciate if you take a moment to rate the answer.

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If you still have any doubts, need clarification - please be sure to ask.

I am here to help you with all Social Security / Tax related issues.

Lev
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Category: Tax
Satisfied Customers: 33,142
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