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posted Jun 4, 2019 9:27:23 PM

I sublease a work space and would like to deduct the amount I am paying for my LLC expenses. All payments are in cash. Are there any issues with this?

The aspect of this I'm not clear on is whether there are issues if I am not officially on any leases. I am currently figuring out with the primary lease holder of the space whether he or I need to do anything in order to make this arrangement a valid deduction.

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1 Best answer
Level 3
Jun 4, 2019 9:27:25 PM

If you are subleasing a workspace for your LLC, yes, you can deduct it.  However, you need to have a paper trail.  So, if you are paying cash, you need to be getting receipts when you make the payments.  The one you are subleasing from can write you a receipt.

You do not have to be "Officially" on the lease to deduct it as long as you can prove you are paying it. It would be a good idea if you were though. If you have no way to prove you have paid it, then if you would be audited, there is a good chance you would end up not being able to take that deduction and then have to pay taxes and penalties.

As a business, you always want a paper trail and proof of payments.

1 Replies
Level 3
Jun 4, 2019 9:27:25 PM

If you are subleasing a workspace for your LLC, yes, you can deduct it.  However, you need to have a paper trail.  So, if you are paying cash, you need to be getting receipts when you make the payments.  The one you are subleasing from can write you a receipt.

You do not have to be "Officially" on the lease to deduct it as long as you can prove you are paying it. It would be a good idea if you were though. If you have no way to prove you have paid it, then if you would be audited, there is a good chance you would end up not being able to take that deduction and then have to pay taxes and penalties.

As a business, you always want a paper trail and proof of payments.