Can I Deduct My Home Office? A Simple Guide

If you’re self-employed and run your business from home, the home office deduction can be a great way to lower your tax bill. But the IRS has strict rules — and it’s easy to get it wrong.

Here’s a clear, simple guide to help you understand when you qualify, what you can deduct, and how to do it correctly.

✅ The Exclusive and Regular Use Rule

To claim the home office deduction, your office space must meet two requirements:

• Exclusively for business – You can’t use the space for personal activities, even occasionally.

• Used regularly for business – It must be a consistent place of business, not just a backup option.

A spare bedroom that doubles as a guest room or family storage space does not qualify. Nor does the kitchen table, even if you work there every day.

❌ Employees Typically Can’t Claim It

If you work from home as an employee (even full-time), you cannot deduct your home office under current tax law. The deduction for unreimbursed employee expenses was suspended through 2025 under the Tax Cuts and Jobs Act.

Only those who are self-employed, freelancers, contractors, or small business owners may qualify.

🧾 What Expenses Can Be Deducted?

If you qualify, you can deduct a portion of many home-related expenses. Here's what may be included:

• Mortgage interest (not principal payments)

• Rent (if you're a renter)

• Utilities – electricity, water, gas

• Property taxes

• Homeowner’s or renter’s insurance

• HOA fees

• Repairs and maintenance related to the entire home (e.g., roof repair) or specifically to the office space (e.g., fixing a broken office window)

• Depreciation (for homeowners)

• Internet service (if used for business)

Important: These must be ordinary and necessary expenses for your business. Personal-use items or improvements that benefit the whole family (like remodeling the kitchen) are not deductible.

📏 How to Calculate the Deduction

There are two methods you can use:

1. Simplified Method

• Deduct $5 per square foot, up to 300 square feet (maximum $1,500).

• No need to keep detailed expense records.

• Great for smaller home offices.

2. Regular Method

• Calculate the percentage of your home that your office occupies.

• Example: If your home is 2,000 sq. ft. and your office is 200 sq. ft., you can deduct 10% of eligible home expenses.

• You’ll need to track actual expenses like utilities, rent, and property taxes, and apply the percentage.

Repairs made specifically to the office (e.g., painting the office walls) are fully deductible under the regular method.

📝 A Quick Example

Let’s say your home office is 10% of your home’s total square footage. You paid:

• $12,000 in rent

• $2,400 in electricity

• $1,200 in internet

• $300 to repaint the office

Your total deduction could be:

• $1,200 (10% of rent)

• $240 (10% of electricity)

• $120 (10% of internet)

• $300 (100% of office repainting)
  = $1,860 total deduction

🛑 Common Mistakes to Avoid

• Mixing personal and business use – even part-time personal use disqualifies the space.

• Using space temporarily – occasional use doesn’t count.

• Claiming as an employee – not allowed under current law.

📘 Further Reading

• IRS Topic 509 - Business Use of Your Home (broad overview)

• IRS Publication 587 - Business Use of Your Home (more details)

Final Thoughts

The home office deduction can save you money — but only if you follow the IRS rules carefully. Make sure your space qualifies, choose the right calculation method, and keep records of your expenses.

When in doubt, talk to a tax professional who can help you file correctly and maximize your deductions without raising red flags.