Can I Get a Home Business Tax Deduction If I Have Two Businesses?
If you run two businesses from your home, you can take a home business tax deduction for both businesses. However, there are rules you must follow.
You can claim the home office deduction if you have a dedicated workspace in your home for an office. This area can’t be used for personal activities. To claim it for two different businesses, the office space must qualify as the principal place of business for both.
If both businesses meet the criteria for a home office deduction, you need to file a separate Form 8829: Expenses for Business Use of Your Home for each business.
How to determine your home office deduction
To deduct home business expenses, divide the expenses between the two businesses. Base the split on how much you use your home office for each business. You have to manually divide your office space and enter it as if you had two separate offices. The total square footage submitted for each business can’t be more than the total square footage you would submit if you only had one home business. You can choose to divide your space based on time or space usage.
You can also use the simplified method for your home office deduction. If so, you’re limited to a maximum of 300 square feet for all your businesses combined. Divide the 300 square feet among your businesses in a logical way. Don’t give more square feet to a business than you actually use for that business.
Have more questions about home office deductions?
Have additional questions about the home office deduction? Rely on our team of small business certified tax pros to get your taxes right and keep your business on track. Connect with us at blockadvisors.com.
Our small business tax professional certification is awarded by Block Advisors, a part of H&R Block, based upon successful completion of proprietary training. Our Block Advisors small business services are available at participating Block Advisors and H&R Block offices nationwide.
In response to the coronavirus, congress has created several tax incentives for small businesses. Learn from our experts how these provisions can help you.
The CARES Act offers helpful tax breaks and cash flow solutions for small businesses. Learn how to qualify with advice from H&R Block’s tax and accounting experts.
Taxes can be complicated for small business owners. Learn more about some of the best small business deductions to lower your tax bill with this list.
Thinking of creating a husband and wife business? Learn about small business partnerships and the pros and cons of joint ventures with H&R Block.