Skip the home office deduction, which triggers IRS audits and saves little. Instead, use the Augusta Rule: have your business rent your home for occasional board meetings. The rental income stays off your personal return while the business deducts the rent expense.
Home office deduction. We don't love this tax deduction. It has been known to increase the DIF score with the IRS. The IRS doesn't think that you actually use your home office just for business purposes, and therefore it's very easy for them to overrule that. It is in fact not a lot of money. So we don't actually love the home office. What we love is a strategy we call corporate rent, others call the Augusta Rule. The way that works is your business can rent your house from you to have a company board meeting once a month, for example. Your business can rent from you as an individual As an individual, because you're not renting your house out for that many days, you actually find an area in the tax code that allows you to not have to claim that rental income. Now, you don't get to claim any sort of expenses for renting the house, but you don't have to pick up any of the income. Your business takes a rent expense, but you personally don't have to pick it up as rental income. That gives you a much better tax strategy than the home office deduction.
