(2022) If you use the home office for two types of income!

If you use the home office for multiple activities across different types of income, the deductibility of the office costs must be checked separately for each type of income.

• First, check for each activity for which you use the home office whether an "alternative workplace" is available or whether the home office is the "centre" of the respective activity.
• Then determine the proportion of time you use the home office for each type of income, e.g. 50% for self-employment and 50% for employment.
• Next, allocate the home office costs according to the proportion of use, regardless of whether the expenses are deductible for this type of income. For example, for self-employment, 50% of the costs are deductible up to 1.250 Euro if "no other workplace is available", or even unlimited if the home office is the "centre of activity". The other 50% of the costs are not deductible for employment because another workplace is available at the employer's premises.
• The question is whether in this case the maximum deduction amount must also be divided, so that for self-employment the 50% cost share is only recognised up to 625 Euro, or whether it is deductible up to 1.250 Euro.

Currently, the Federal Fiscal Court has ruled that the statutory maximum amount of 1.250 Euro is not to be divided. "A division of the maximum amount by creating partial maximum amounts for the different types of income is not permitted." Thus, if the home office is used for both employment and self-employment, the corresponding share of the home office costs can be deducted as business expenses up to 1.250 Euro - and not just 625 Euro (BFH ruling of 25.4.2017, VIII R 52/13).

Mr Schmitt is a civil servant with a fixed workplace. He uses the home office for his main job for about 3 hours a week and also for about 6 hours for a part-time self-employed writing activity. The home office costs amount to 3.000 Euro per year.

Costs of 2.000 Euro (2/3) are attributable to the part-time job, which are deductible up to 1.250 Euro. The cost share of 1.000 Euro (1/3) for the main job is not recognised.