Discussion:Business space usage in an apartment

1) I live in a 3 bedroom rented townhouse and have my office setup in one of the rooms. How much percentage of rent can I claim as office space? rather what is the maximum permissible deduction? 2) How much can i claim on utility bills? 3) I did a business travel last year and how are the travel expenses (airline tickets, hotel) handled in deductions? 50% like meals and entertainment or total?

I am not talking about deduction on my 1040. I am talking about claiming a % of space usage on companys expense sheet. suppose I pay a rent of 2100/month for my apartment. My business address is same as my residence address. Since, I am using 1 bedroom as office space for my business, I am thinking in the lines of claiming like 33% of the rent I pay, which is 700$/month as office space and take the expense on the companys balance sheet.

A1: A competent, knowledgeable, experienced tax professional you engage to do the job and to whom you pay a fee.

Q2: Would you be kind enough to point me to any IRS publication where I can read some print on business space and mileage reimbursement usage?

A2: Pubs. 334 & 463 & 535.

I don't think I've connected with you regarding the business space. One more try: deductions are allowed only to the person who makes a payment. You, as an individual, signed the lease for your apartment and are responsible for the rent. You corporation is a separate "person" under the law and is not involved. If you use part of the apartment for the benefit of the corp., it can reimburse you for the expenses you incur that would be deductible by by you as home office expenses. Those expenses are discussed in Pub. 587.

If that doesn't do it for you, I hope another TaxAlmanac participant can explain it better. -- Larry Hess, CPA | Albuquerque, NM

"If you use part of the apartment for the benefit of the corp., it can reimburse you for the expenses you incur that would be deductible by by you as home office expenses. Those expenses are discussed in Pub. 587." So, based on this, .......my S-Corp is reimbursing me for using 400 sqft of my apartment (1500 sq ft) as my home office....". But, as such, I cant take deduction for the apartment by the S-corp by itself..Is this true interpretation?

Larry, who then is entitled to the home office deduction if not a business owner. You wording makes it seem as if no one can claim it unless the property is in the name of the corporation. I thought the purpose of the home office deduction was for the benefit of small business owners and those who work from home.

That's a public policy, if not political, issue that you have to take up with Congress. You and I have to know and follow the rules that they and the IRS have given us. In a case like yours, that's a good reason to take Kevin's advice. -- Larry Hess, CPA | Albuquerque, NM

Is that your answer to every topic posted here? I don't see the need to feel threatened by people asking general questions. And if you were paying $215/hr for tax advice you would at least want to know some basics to make the best use of your time, or at least any responsible person would.

Interesting, all the more reason to know a little something yourself.

A little sweat and research (at least the IRS site) should be part of each taxpayer's diet.

Exactly