Do I lose tax benefits if I move home office out of the home?

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doss
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Joined: Tue Nov 01, 2011 9:52 am

Do I lose tax benefits if I move home office out of the home?

Post by doss » Wed Jun 27, 2018 7:13 am

Hi all,
I have a home office that I use for a side hustle (I also have a full time job in the corporate world). However, I find that I can not focus/concentrate at home and am looking at renting some coworking space somewhere.

If I move my office out of my house, do I lose major tax benefits? What kind of tax deductions/reimbursements, if any, could I get from having an office outside of the home?

Aside from my sanity, I wonder if it makes financial sense to move my home office out of the house.

JoeRetire
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Joined: Tue Jan 16, 2018 2:44 pm

Re: Do I lose tax benefits if I move home office out of the home?

Post by JoeRetire » Wed Jun 27, 2018 7:23 am

doss wrote:
Wed Jun 27, 2018 7:13 am
Aside from my sanity, I wonder if it makes financial sense to move my home office out of the house.
It seems unlikely that an outside office can cost less than a home office.

You get to decide how much your sanity is worth.

carolinaman
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Location: North Carolina

Re: Do I lose tax benefits if I move home office out of the home?

Post by carolinaman » Wed Jun 27, 2018 7:40 am

If you move your home office to another place, you can deduct the expenses incurred at the new site. However, renting space will be more costly than using your home for an office. You will no longer be able to deduct any office expense for your home. You have to decide if it is worth it.

Financially, it may not make sense but you have to decide if the change is beneficial enough to your side hustle to warrant the added expense. Another thought would be to try to change your home office so that it is more conducive for your work. Perhaps another room that is more private.

Miakis
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Re: Do I lose tax benefits if I move home office out of the home?

Post by Miakis » Wed Jun 27, 2018 7:52 am

Having an outside work space does not automatically disqualify you from having a home office.

The IRS has a very clear discussion in Publication 587.

JBTX
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Re: Do I lose tax benefits if I move home office out of the home?

Post by JBTX » Wed Jun 27, 2018 11:33 am

This may be a case of the tax tail wagging the dog here. The actual costs of a remote office and associated benefits are far more Important than the fairly modest tax impacts. Also as stated you may still be able to deduct some home office expenses regardless.

doss
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Joined: Tue Nov 01, 2011 9:52 am

Re: Do I lose tax benefits if I move home office out of the home?

Post by doss » Wed Jun 27, 2018 2:28 pm

Wait, I am confused.

So what deductions are available for a remote office?

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Duckie
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Re: Do I lose tax benefits if I move home office out of the home?

Post by Duckie » Wed Jun 27, 2018 9:00 pm

doss wrote:So what deductions are available for a remote office?
Office rent can be deducted on IRS Schedule C. The instructions specifically state: "Enter on line 20b amounts paid to rent or lease other property, such as office space in a building." Plus you can deduct office expenses (line 18) and utilities (line 25).

jjface
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Re: Do I lose tax benefits if I move home office out of the home?

Post by jjface » Wed Jun 27, 2018 9:46 pm

You are confusing yourself. Home office and rented office space are totally separate.

If you rent some office space exclusively for your business then you get to deduct all those expenses.

If you use space in your home exclusively and follow all the other home.office rules you get to deduct home expenses for using part as a home office. So if you stop using your home for your business then you can't claim this any more.

The main benefit of a home office is that it is 'free' and you can claim deductions for expenses you probably will incur anyway.

radius9918
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Re: Do I lose tax benefits if I move home office out of the home?

Post by radius9918 » Thu Jun 28, 2018 1:51 pm

Under the 2018 tax plan does the home office deduction even still exist?

Rupert
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Re: Do I lose tax benefits if I move home office out of the home?

Post by Rupert » Thu Jun 28, 2018 2:10 pm

radius9918 wrote:
Thu Jun 28, 2018 1:51 pm
Under the 2018 tax plan does the home office deduction even still exist?
If you're self-employed, you can still deduct home office expenses against your self-employment income. If you're company employed, the deduction has been suspended at least until 2025.

Barefootgirl
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Re: Do I lose tax benefits if I move home office out of the home?

Post by Barefootgirl » Sun Jul 01, 2018 10:35 am

My brother is living in an extended stay hotel between just selling his home and buying another one. He also has a side hustle that he used to work from home...this is helpful, thank you.
How many retired people does it take to screw in a lightbulb? Only one, but he takes all day.

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