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I have a mobile auto detailing business. I have an office at home with my computer where I do all my marketing/online advertising, calling customers, all that good stuff. The apartment that me and my wife live in is in her name but I make the rent payments. Can I claim a portion of those payments as a deductible business expense on my taxes ?

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    Tax questions need a country tag as the rules vary by jurisdiction. Jan 27 at 2:41
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    If in the US - also what state it is? If it's a community state things may be easier to explain.
    – littleadv
    Jan 27 at 2:48

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Assuming you are in the US, this should be standard home office rules.

You can claim only space you use EXCLUSIVELY for business -- if it's a corner of the living room, that means only the area occupied by your desk and chair, and even those only if you don't also use them for personal activity such as browsing Stack Exchange. Few people are really willing or able to carve out that space, but it can be done. (Easier if it's a separate room that you stay out of except when working, of course.)

Once you have established that space which is exclusively used as office, you can then pro-rate by the ratio of that space to the rest of the cost of maintaining the house or apartment... or you can use the Simplified Home Office rules, which don't require all that calculation and just say "deduct $5 per square foot of legitimate office space."

See https://www.irs.gov/businesses/small-businesses-self-employed/simplified-option-for-home-office-deduction and the documents referred to by that page.

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  • I think the real question is whether they can deduct rental payments they're not legally obligated to pay
    – littleadv
    Jan 27 at 4:58
  • Transfers between spouses are not taxable and unless the spouses explicitly manage finances separately I doubt this would be an issue, but generally it would be easier to explain in a community property states.
    – littleadv
    Jan 27 at 6:38
  • I would assume that if transfers between spouses are not taxable, they're also not deductable. Seems too obvious a loophole otherwise. Which brings us back to one person being able to deduct the cost of each home office, however it gets paid for.
    – keshlam
    Jan 27 at 8:22
  • So can I make the deduction for that space even if the lease for the apartment is in my wife’s name, but I pay the rent ? I can prove I pay it on my bank statements if it ever came into question Jan 28 at 21:07
  • As long as only one of you takes the deduction, I don't think the IRS cares much about which pocket the money was pulled out of. If you were claiming a "real" office you might need to be more rigorous
    – keshlam
    Jan 28 at 22:23

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