Two Correct Ways to Deduct Home Office with a Partnership

With the COVID-19 experience, you and your partners may be doing a lot of work from home or even working from home primarily. Is the home-office deduction in the mix? If you operate your business as a partnership, you have two ways to correctly deduct your home-office expenses. If you have a tax-deductible home office and operate as a partner in a partnership, you have two ways to get a tax benefit from the home office: Deduct the cost as an unreimbursed partner expense (UPE), or Get reimbursement from your partnership via an accountable plan (think expense report). Unreimbursed Partner Expense As a partner in a partnership, you generally can’t deduct any of the partnership expenses on your

The Dark Side of C-Corps

As you likely know, the Tax Cuts and Jobs Act made a big change in how C corporations are taxed—one flat, 21 percent rate. The new, lower rate makes the C corporation far more appealing than in prior years. But you also need to look at the dark side of this possible opportunity. Double Taxation of Corporate Dividends Say you run your business as a C corporation. The business is successful, and your corporation builds up a hefty amount of earnings and profits (E&P). While lots of E&P (a tax accounting concept similar to the financial accounting concept of retained earnings) indicates a financially healthy operation, it also creates tax concerns when you try to get money out of the company. Do

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