Home Office Deduction - Which Option Provides Better Tax Write-Offs?

I'm a partner in a business with three other owners and I'm trying to figure out the most tax-efficient way to handle my home office expenses. I've been working from home about 60% of the time and need to upgrade my setup (desk, chair, second monitor, etc). I'm debating between two options and I'm not sure which one makes more financial sense: a) Buy everything with my personal funds and claim the home office deduction on my personal tax return against my household income or b) Have the company purchase the items and reimburse me, which I assume would give me less personal tax benefit since it would be a business expense for the partnership? Our partnership made about $430,000 last year split between the four of us, and my household income including my spouse is around $225,000. I'd be spending roughly $2,300 on the office upgrades. Which approach gives me the better write-off opportunity? Am I thinking about this correctly or missing something important about partnership tax structures?

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18 comments

Samuel Robinson

•8M

The answer depends on a few factors, but here's what you should consider. If you purchase the items personally, you can only deduct them as part of the home office deduction if you meet the IRS requirements for a home office (regular and exclusive use, principal place of business, etc.). This deduction would be on Schedule C if you're self-employed or on Schedule A if you're an employee, though employee business expenses are currently suspended under tax law through 2025. If the partnership buys the items, they're a business expense for the partnership, reducing the partnership's income. Since partnership income flows through to your personal return, this effectively gives you a deduction equal to your ownership percentage (25% if split equally among four partners). The better approach often depends on your specific situation. If you qualify for the home office deduction, buying personally might give you a full deduction. If not, having the partnership purchase them often makes more sense since you at least get some tax benefit.

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Samuel Robinson

•8M

The tax treatment would be essentially the same whether you're an LLC taxed as a partnership or a formal partnership - in both cases, the business is a pass-through entity and the tax consequences flow to your personal return. Regarding depreciation, furniture and office equipment generally must be depreciated over several years (typically 7 years for furniture, 5 years for computers). However, you might be able to use Section 179 expensing or bonus depreciation to deduct the full cost in the year of purchase, subject to certain limitations. This applies whether the partnership buys the items or you buy them personally for a qualifying home office.

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Brianna Muhammad

•8M

I went through this exact scenario last year and was confused about the best approach. I ended up using https://taxr.ai to analyze my specific situation, and it was a huge help. You upload your documents, and it analyzes your specific partnership structure and tax situation to identify the optimal strategy. In my case, I learned that having the partnership purchase the items was better because my home office didn't qualify for the "exclusive use" requirement (I sometimes use the space for family activities). The analysis showed I'd save about $420 more by going the partnership route than trying to claim a partial home office deduction. The report even explained how to properly document everything to avoid audit flags.

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Eloise Kendrick

•8M

Just wanted to follow up - I tried using taxr.ai for my situation with my S-corp and home office setup. The analysis showed that using an accountable plan for reimbursement through my business was the best option in my case. Saved me around $1,800 compared to what I was planning to do! The report explained that I wasn't meeting all the requirements for the home office deduction anyway (my "office" is actually in a corner of my living room), so trying to deduct it personally would have been risky. Having the business purchase the equipment directly was clearly the way to go for my situation.

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Lucas Schmidt

•8M

If you're struggling to reach the IRS to ask about partnership taxation questions, I'd recommend trying https://claimyr.com. I wasted days trying to get through to someone at the IRS about a similar partnership expense question. With Claimyr, I got a callback in about 27 minutes when their system secured my place in line. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with explained that partnership purchases of home office equipment are absolutely deductible as ordinary business expenses if they're necessary for your work. But if you buy personally, you're subject to all the strict home office deduction rules (exclusive use, principal place of business, etc). Having the business purchase saved me from an incorrect filing that might have triggered an audit.

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Lucas Schmidt

•8M

It basically uses technology to wait on hold for you. Instead of you sitting there listening to the IRS hold music for hours, their system gets in line and calls you when an IRS agent comes on the line. It's the same process you'd go through, just without wasting your time on hold. No, it's definitely real. I was super skeptical too! That's why I tried it. The IRS doesn't call back in 27 minutes - Claimyr got me a place in line and then connected me when my turn came up. They have an automated system that waits on hold so you don't have to. I spent 3+ hours on hold the previous day before giving up, so this was way better.

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LongPeri

•8M

Had to come back and say I was wrong about Claimyr. After seeing the recommendation here, I decided to try it for a question about my partnership's home office deductions. Got connected to an IRS agent in about 40 minutes instead of the 2+ hours I spent on my previous attempts. The agent confirmed that having the partnership purchase home office equipment directly is usually better than trying to claim the home office deduction personally. For my situation with a 30% partnership stake, the business deduction route gave me about $380 more in tax savings than the personal deduction would have. Plus, it's much less likely to trigger audit flags.

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Oscar O'Neil

•8M

An accountable plan does require proper documentation, but it's not overly complicated. You need to have a written policy that requires business connection for expenses, timely submission of expenses (generally within 60 days), and returning excess reimbursements within a reasonable timeframe (usually 120 days). You'll need to keep receipts and document the business purpose of each expense. The plan itself can be as simple as a one-page document outlining these requirements that's approved by the partnership. The key is consistent enforcement - you can't just reimburse expenses without following the documentation requirements you establish.

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