Tools & guides Home tax savings for sole proprietors & single-member LLCsIf you operate as a sole proprietor or a single-member LLC taxed as a sole proprietorship, a qualifying home office can provide a valuable business deduction. Understanding the home office deductionIf you use part of your home for your business, you may be able to deduct a portion of certain household expenses. The rules depend on how your space is used, how your business is structured, and whether the space meets the IRS requirements for business use of a home. 
How to make the most of your home office deduction
Does your home office qualify?A portion of your home generally must be used regularly and exclusively for qualifying business purposes. Occasionally working at the dining-room table doesn’t create a home-office deduction. Examples of qualifying business spaces include: Your principal place of business A regular location for administrative or management activities A separate structure used for business purposes (e.g., studio) A regular place for meeting customers or clients Here’s the records you should maintainBusiness-use square footage
Total home square footage
Utility bills
Homeowners/renters insurance
Applicable rent or ownership expenses
Repairs and maintenance records
Documentation supporting regular and exclusive use
Photographs or a simple diagram of the dedicated business area can also be useful
What about partners?Partners are different from both sole proprietors and S corporation shareholders. If you are a partner and incur home-office or other business expenses personally, the treatment can depend on your partnership agreement and the partnership’s reimbursement policy. Talk with us before claiming unreimbursed partnership expenses or having the partnership pay personal home expenses. Let’s discuss your situationOne important distinctionThe popular “Augusta Rule” generally isn’t a strategy for a sole proprietor or disregarded single-member LLC to rent the owner’s residence back to the business. For federal income-tax purposes, the owner and disregarded business are the same taxpayer. If your business has grown or your entity structure has changed, talk with us before implementing a home-office or related-party rental strategy. Talk to us for guidanceSources & authority
IRS Publication 587 — Business Use of Your Home
IRC §280A — Business Use of Home
IRC §162 — Ordinary and Necessary Business Expenses
|
Home tax savings for sole proprietors & single-member LLCs
Frequently asked questions
We take care of your books for you, so you can get back to the job of running your business and generating profits.
We offer payroll solutions that meet your business's needs and enable you to spend time doing what you do best--running your company.
We offer a variety of services to help make sure that you are taking full advantage of Quickbooks' many features.
We're here to help you resolve your tax problems and put an end to the misery that the IRS can put you through.
We offer one-on-one guidance and a comprehensive financial plan that helps manage risk, improve performance, and ensure the growth and longevity of your wealth.