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Level 2

Question

Home office deduction with 1065-K1

Forum|Forum|6 years ago
February 9, 2020
5 replies
33 views

I include a 1065-K1 in my personal taxes for my business that is a partnership.

I use part of my house as office to conduct this business.

Can I claim home office deduction? If yes, then how?

TurboTax gives the Home Office deduction option only when I have a business income thru 1099-MISC.

I do not see a Home Office deduction option when I report my business income thru 1065-K1.

Any pointers?

Thanks
ST3000

TurboTax Home & Biz Windows

DavidS127

Level 13

It depends on whether you were required to pay these expenses under the partnership agreement.

Your home office expenses fall within "unreimbursed partnership expenses", which are discussed in the "Unreimbursed Partnership Expenses" section of IRS Instructions for Schedule E at this link.

As explained by Community user PatriciaV, there are basically three ways a partnership agreement can handle this issue:

specifically allow reimbursement for partner expenses outside the partnership,
specifically disallow reimbursement for partner expenses outside the partnership, or,
be silent as to reimbursement.

Only number 1 "specifically allow reimbursement" permits the deduction according to the IRS instructions.

If these expenses are allowed from you as a deduction, you enter them as a part of the Schedule K-1 entry. TurboTax will ask you about unreimbursed partnership expenses during the interview, and follow up entry at the end of Schedule K-1 input.

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st2003Author

Level 2

Thank you for that explanation DavidS127.

>> TurboTax will ask you about unreimbursed partnership expenses during the interview, and follow up entry at the end of Schedule K-1 input.

TurboTax does not ask me about the un-reimbursed expenses after schedule K-1 inputs??!!

I am entering all the schedule K-1 information under the Personal Income Tab in TurboTax.

Other place I see for entering such expenses is under Personal Deduction & Credits tab ==> Employment Expenses ==> Job Related Expenses. But that does not co-relate that expense back to the unreimbursed partnership expenses.

Still a little lost

ST2003

ThomasM125

Level 15

You should see a screen in TurboTax when you enter your partnership K-1 schedule that says "Describe this Partnership" and one of the options is "I am required to pay supplemental business expenses on behalf of this partnership/LLC for which I am not reimbursed."

Once your check that box, you should be allowed to enter your home office expenses as a single line item, under "Miscellaneous Supplemental Expenses."

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KathrynG3

Level 14

It is after you have entered dollar amounts.

jasncaly

Level 2

Ok I see it now thank you. There are two screens that are titled "Describe the Partnership". One towards the beginning and another towards the end. The screen towards the end is the one I needed.

mrblack66

Level 2

I search and cannot find this form 1065-K1 included and I upgraded to the Home and Business version. I have a partnership with K1 income not schedule C.

any help appreciated.

PatriciaV

Level 15

Please clarify if the Partnership sent you Schedule K-1 and exactly what entry you are trying to make.

@mrblack66

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mrblack66

Level 2

Yes I have a K1 and filled in all the correct entries into TT. I am in partnership but our business is run remotely from our homes and I have a dedicated office within my home strictly for business. Thought from this thread that the 1065 K1 form is where you enter home office deduction for K1s but I cannot find this in my version. The only place I see for home office deduct is with a Schedule C but that is not the case for me.

thank you

wardufus

Level 2

I have the same situation, which I have solved over the past few years by using another copy of turbo-tax and in it using the home office deduction calculator as if my k-1 income was from a Sched C business income and then putting that number in Sched E as a business expense not paid by the k-1 partnership. Too bad there's no home office deduction calculator for k-1 related expenses, but the system I propose here seems to work well. Of course, it is important to note that I am not a tax accountant.

mrblack66

Level 2

Ward

Great suggestion. I will give it try and see if it creates any issues. I used to have some Schedule C income along with my business no was never an issue until this year where I dont have any. Why I am confused by all of this . appreciate your response.

Kerry Kurin

Level 2

I have a question but did not know where to post it after scanning 9 pages this comes closest. I JUST HAVE an LLC not a Partnership so maybe this is the wrong place. I own 2 homes outright. My personal home and one my girlfriend lives in. My home office is in her house (different location). While doing the Home Business it puts in my personal residence and not the actual place my office is at. How do I get the correct address into the spot where Home Office Address is and not my personal residence. Am I filing this wrong or placing the home office wrong. Thank you

Monikak11

Level 2

If you have a Single Member LLC and are reporting your business on a Schedule C as a disregarded entity, you can claim home office expense on Schedule C.

Generally speaking, to qualify for the home office deduction, you must meet one of these criteria:

Exclusive and regular use: You must use a portion of your house, apartment, condominium, mobile home, boat or similar structure for your business on a regular basis. This also includes structures on your property, such as an unattached studio, barn, greenhouse or garage. It doesn't include any part of a taxpayer's property used exclusively as a hotel, motel, inn, or similar business.
Principal place of business: Your home office must be either the principal location of your business or a place where you regularly meet with customers or clients. Some exceptions to this rule include daycare and storage facilities.

Please see this TurboTax article and IRS Publication 587 for more information on the deduction for business use of a home.

See also this help article on reporting two locations for a home office.