Have a client that works as a W-2 employee and has a side business doing video editing out of his apartment in NYC.
Last year he deducted the simplified method (return prepared by someone else).
This year I asked him if we would like to go for the full method instead of the simplified method. He provides his office is 144 square feet and the total apartment is 700, which seems reasonable for NYC. What jumped out at me was the fact he said he paid $34,000 for his annual rent, which again doesn't surprise me because its NYC. However, this gives him an extremely large in home office deduction of 8K, which may be normal for NYC, but to me seems really high.
Are my concerns valid?
If he uses this office space for his W-2 job if he's WFH, he violates the exclusively used test, correct?