The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

Home Office deduction for rental income. How are you guys doing it? If at all...

Remove ads while supporting the Unscripted philosophy...become an INSIDER.

Striver

Bronze Contributor
Read Millionaire Fastlane
Mar 23, 2017
126
122
138
45
USA
Since the IRS views this as passive income, you don't get to deduct a home office. Can I just put all the income on the Schedule C, instead of the Schedule E?

A lot of property upkeep and office work goes into this, so it's not passive at all. According to the IRS publications I've read, it seems like I meet the "active business" aspect of filing, therefor should be able to deduct a home office. Which is exclusively used for the business...
 

Don't like ads? Remove them while supporting the forum. Subscribe.

OP
OP
Striver

Striver

Bronze Contributor
Read Millionaire Fastlane
Mar 23, 2017
126
122
138
45
USA
Well, it looks like I would then have to pay self-employment tax (15.2%), which would greatly offset my lowly home office deductions. Hmmm...
 

CareCPA

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 2, 2017
851
3,043
760
31
Pennsylvania
I wouldn't make any effort to put it on a Schedule C due to the self-employment taxes you mentioned.

Rentals are always* Schedule E, so passive. I imagine the home office doesn't offer massive tax savings, so I wouldn't spend too much time worrying about it.

* There are always exceptions. That's what makes taxes fun!
 
OP
OP
Striver

Striver

Bronze Contributor
Read Millionaire Fastlane
Mar 23, 2017
126
122
138
45
USA
Thanks! Yeah, after reading for two straight days on the matter, it then dawned on me that we would never be able to "out deduct" the difference for the SE tax anyway.

Regarding the passivity, though, we have definitely deducted the home office in the past. Looking back, I don't think we should have because of the SE tax.
 

Create an account or login to comment

You must be a member in order to leave a comment

Create account

Create an account on our community. It's easy!

Log in

Already have an account? Log in here.

Sponsored Offers

  • Sticky
FEATURED! Introducing... WEALTH EXPO$ED, A Short Story By MJ DeMarco
Got it several weeks ago and have listened to it several times now. I've definitely met both...
  • Sticky
MARKETPLACE Fox' Web School's "Legend" Group Coaching Program 2020
For those with the "can web design be Fastlane" question this video by @MJ DeMarco is a great...
  • Sticky
MARKETPLACE You Are One Call Away From Living Your Dream Life - LightHouse’s Accountability Program ⚡
Just got off the phone with @LightHouse. Having just a 45 minute conversation with him has...
  • Sticky
MARKETPLACE Kill Bigger Incubator
@Kak Out of curiosity, what types of businesses are you advising on? (I read this whole thread...
  • Sticky
MARKETPLACE Lex DeVille's - Advanced Freelance Udemy Courses!
Just bought 5 of your Upwork courses. Thanks for making valuable content Lex!
  • Sticky
MARKETPLACE Grow Your Business With a Book (An Unorthodox Marketing Strategy That Built One of the Largest...
Thanks for your offer to look at my book. Here's the link to the squeeze page Buy The Prosperous...



Forum Sponsor

sponsor

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom