Office in home

[oceanlovin'ea]

Would you deduct office in home for an office that is used by wife for part time job as an answering service and husband is in sales and also uses the office for his sales work?
The office does meet the exclusive use test for being used for business but not all schedule C business.

He has to go to another town for weekly meetings at the company's office. There is also a small office in town that he goes to but he answers his emails from home in the mornings and figures estimates and writes up contracts from home.

She may be starting to do more of the answering service work at home in the office. At least 30 hours a week for one company and probably 20 for the one she is working with now.
But since her husband uses the office too, will that disqualify her using office in home deduction?

Linda F

[Gretel]

Linda, if I understand correctly than wife has sch.C business and husband has 2106 expenses? If he is not required by his employer to have an office in home than he cannot take OIH expenses. This will disqualify wife's OIH as well.

If both meet all requirements you can take OIH for both and split the expenses.

[oceanlovin'ea]

Not required

I don't think he is required but the company prefers it. I would have to ask him to be sure.

Linda

[Gretel]

If employer prefers it that much they might as well require it and give it to your client in writing.

[fliszt]

Rather than

disqualify the wife from the entire office, wouldn't it be appropiate to re-define the square footage of the wife's office? And then take the OIH deduction? (this assuming husband is not allowed an OIH)
Larry

[oceanlovin'ea]

half the room

You mean, deduct the square feet of half of the room for her. I hadn't thought of that. Good idea. Every little bit always helps.

Thanks.

Linda F

[fliszt]

Glad I could

help you. And yes every little bit does help.
Larry

[Gretel]

You mean, deduct the square feet of half of the room for her. I hadn't thought of that. Good idea. Every little bit always helps.

Unless each t/p has their own separate area in the office you would not be able to do this. If hubby is disqualified by OIH rules, his being in the room disqualifies the room as well. If they have separate areas then you can just take her area, which might be more or less than 50%.

[Lion]

2 businesses in 1 room

I had a MFJ return with both spouses having schedule C businesses. They had a huge room over the garage. Wife had her desk and computer and file cabinets and telephone and...and husband had his on the other side of the room. They actually had long tables down the middle of the room dividing their areas and used to have common items (a fax) on those tables. As electronics have gotten cheaper, they have no more common items and split the tables as work areas also. She's very organized and has the room split exactly in half, so we assign 50% to her and 50% to him. Each uses his/her own area regularly and exclusively for his/her own business. Each purchases his/her own items from the appropriate business checking account or credit card. No overlap between businesses.

[ED SMITH]

Unless they have other itemized deductions, the husband may not have much of a deduction. In any case, unless it is absolutly required by his company, I wouldn't jeopardize the wife's Sch C expense as dollar for dollar it is worth more than hubby's itemized expense.