Need some clarification on how to properly record home office expenses in QBO, here's some initial info:
- Business is Multi-member LLC (2 partners) started in 2023
- Home office expenses are paid by one partner using their personal accounts
- I've read a lot of different articles, forums, etc. and one of them said to do a "split" expense showing 2 lines: A debit to "home office expense" with the amount spent (calculated as a percentage of home office use) and a credit to "partner contribution" for the same amount. This is how I've recorded all home office expenses for 2023.
- No reimbursements were made to the partner, the amounts simply remained in the "partner contribution" equity account
However, now that I'm getting ready to file taxes for last year I notice that all the home office expenses are showing on the P&L but I also know that Home office expenses can be (should be?) deducted on the individual partner's personal returns. So it seems like with this setup I'd be deducting the home office expenses twice, once for business and once on personal which I know is not correct. Question is, how do I record these home office expenses on the business books without "double dipping"? This is what I'm thinking:
Option 1: Because I'm recording home office expenses in the business books, they are treated as a business deduction and they are not to be shown on the partner's personal return
Options 2: I don't record home office expenses in the business books, but later deduct them on the partner's personal return. (However, we lose the ability to see these expenses on the business books which we rather not do)
Are either of these options correct? And if so which one is more advantageous? Or if neither are correct, what's the right way of doing this?
