I live with my partner, work from home part of the time, and am self employed. I pay for the hydro/internet, but all of the bills are currently in his name. I transfer him a monthly amount of cover the expenses. Can I still include these as home office expenses?
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" I transfer him a monthly amount of cover the expenses."
If it's the business that transfers the amount, and it's a reasonable amount, there's no reason I can see why you can't claim what you actually pay your partner for your share of the expenses from your business account.
In the home office section you're asked for "whole house" expenses, as well as "home office only" expenses. So for "whole house" expenses you would claim zero. For "home office only" expenses, you would claim the amount you actually paid from the business account. So long as the amount is reasonable, the IRS will not question it. If it is questioned, then you should have no problem using bank statements to prove the amount paid to your partner, by your business.
Hi Carl, thanks for the response. I'm a sole proprietor and don't have a business account, but the transfers are from the same account I do all my other expensing from. Should that still be reasonable?
Sure, so long as you can prove who/where/what the money was paid to/for, should not raise any eyebrows if you happen to be one of the .01% randomly chosen for audit each year.
I do however, 'HIGHLY" recommend you get a separate bank account (checking account preferable) specifically and explicitly for all business income and expenses. All income earned by the business should be deposited in full to that account, and all expenses paid by, for or on behalf of the business should be paid from that account. Mixing your business income/expenses with non-business related income/expenses can bite you. Being that it's close to the new year, it might be a good idea to start the business using it's own account effective on Jan 2, 2018, since that's the absolute soonest you could open such an account for this in 2018.
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