Originally Posted by samnyc
#1;I use an online accounting software for book keeping.
I have a small business and I paid my home rent $11000 from my business account and categorized it as miscellaneous expenses.. Now in the taxes returns I only claim a portion of the money $2400 as business expense for home office rent and rest I show as part of pass through. So in the books it still shows as $11000 miscellaneous.
#2;Is it OK or the books also need to match... if the books match with what I show on taxes then the bank transactions won't match with the books.
Please advise, thank you.
#1;Correct even if you can deduct only $2,400 on your Sch C of 1040 on line 30, yes your book still shows that you deducted $11K as misc expenses as u said(as you recorded $11K as misc exp on your book).so difference is $8,600 since actually only $2400 is deductible on your return.
#2;it is OK unless you deduct the whole of $11K on your return in this case, you can deduct totally $13,400;$11K+$2,400