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Renting an office to yourself in your home

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  • Renting an office to yourself in your home

    We all know of the home office deduction, but I stumbled across the idea of renting the space to your LLC. I'm an EM physician (1099), but I make about $25,000 separate from this as a medical director on a side job (though this job is part of the same LLC as my EM job). My office is truly from my home, unlike the home office we independent contractors claim to use (as I have myself in the past). Does anyone do this?

    I work about 16-20 hours per month on this side job, and I was thinking I could rent my office to my business once per month, so that I wouldn't exceed the 14 days per year of tax free rental income. Then my business could then deduct the rental expense. I don't know what a fair rate to charge myself for a full day of rental would be ($500? 1000?). I live in a pretty expensive part of town, so I suspect businesses would charge a high rate. But even so, is there a number too high to charge myself? $1000 seems like a lot when I'd be paying $12,000/yr in rent for $25,000 income.

    Finally, if I were to go this route, I assume I couldn't also take the home office deduction for the rest of the month? Right?