Can I take the home office deduction?
The home office tax deduction allows qualified taxpayers to write off certain home expenses related to the business use of their home when they file their taxes. Qualifying for a home office deduction depends on things like whether you are a remote or self-employed worker, whether you use the space on a regular and exclusive basis, and a few other factors.
Intuit TurboTax details the basics and IRS requirements to help you determine if you can take advantage of the home office deduction.
Are you remote or self-employed?
For remote workers, the shift to work-from-home (whether forced or optional) doesn’t qualify for a tax write-off of their workspace as a home office. But for self-employed individuals, the home office deduction could be advantageous.
Prior to the Tax Cuts and Job Act (TCJA) passed in 2017, employees who worked remotely could deduct unreimbursed employee business expenses, including deductions for the qualified home office. However, for the tax years 2018 to 2025, these deductions for employee business expenses were suspended. Then, the passing of the One Big Beautiful Bill (OBBB) in 2025 permanently eliminated the deduction for unreimbursed employee business expenses.
So, if you’re an employee working remotely for an employer rather than a business owner who is self-employed or a 1099 contractor, you don’t qualify for the home office tax deduction.
What qualifies as a home office?
A home office must be either the principal location of your business or a place where you regularly meet with clients, patients, or customers. To qualify for the IRS home office deduction, you must exclusively use the area for business. The home office can be any portion of your house, apartment, mobile home, condominium, boat, or similar structure used for your business on a regular basis and exclusively for business purposes.
A home office can also be an unattached structure on your property such as a barn, studio, greenhouse, or garage. If this is the case for you, then the structure does not have to be the principal location of your business or a place to meet with clients or customers. However, it must be used exclusively and regularly as explained next.
For tax return purposes, certain use of a space in your home for storage or using your home as a daycare facility can also qualify as a home office.
The exclusive & regular use test
Exclusive use of a home office means that the space is only used for business purposes, all the time. The exceptions to the exclusive use test pertain to storage space for inventory or samples used in your business, or your home being used as a daycare facility. In both cases, the regular use test still applies.
To demonstrate the strictness of the exclusive-use requirement, the IRS provides an example of a home office used for full-time business that is worked ten hours a day, seven days a week. If you let your children use the office to do their homework, this violates the exclusive-use requirement and forfeits the chance for a home office deduction.
Another example is an attorney who regularly uses a room to prepare his work but the room is also a den for the family, which means it fails the exclusive test and doesn’t qualify for the deduction.
What qualifies as a business?
Whether your endeavors qualify you for a home office deduction depends on what activities you perform in the home office space and whether they are done regularly. The more substantial the activities, such as time and effort invested and generated income, the more likely you are to pass the test.
For the purposes of a home office tax deduction, profit isn’t the only criteria, although making money from your efforts is a prerequisite to claim the deduction.
For example, if you use your living room exclusively to take care of your personal investment portfolio, then you can’t claim deductions for a home office because your activities as an investor don’t qualify as a business. Taxpayers who use a home office exclusively to manage rental properties may qualify for home office deduction but as a property manager rather than an investor.
What can you deduct?
Deductible expenses for business use of your home include the business portion of:
- Real estate taxes
- Mortgage interest
- Rent
- Casualty losses
- Utilities
- Insurance
- Depreciation
- Maintenance
- Repairs
Generally, you can’t deduct expenses for parts of your home that aren’t used for business, for example, lawn care or repairs made to a workout room.
How much can you deduct for a home office?
Figuring out how much you can deduct for a home office isn’t as complicated as it sounds. Taxpayers who qualify may choose one of two methods to calculate their home office deduction.
Actual expense method
Taxpayers using the actual expense method (required for tax years 2012 and prior) instead of the simplified method must determine the actual expenses of their home office.
When using the actual expense method to deduct home office expenses, you base it on the percentage of your home devoted exclusively to business use. So, for the room used for conducting your business, you’ll need to figure out what percentage of your home it covers.
For example, let’s say you use a room that’s 200 square feet for business operations. If your house is 2,000 square feet, the percentage of your home dedicated to business use would be 10%.
That means that you can write off 10% of expenses like your mortgage interest, depreciation, and utilities, among the others, as your home office deduction. Using an example of a total of $4,500 for the above-mentioned expenses, that would be a write-off of about $450.
Let’s break down that math really quickly:
% business expenses x total expenses = home office expenses
0.10 x $4500 = $450
Simplified method
The simplified method can significantly reduce the burden of recordkeeping by allowing a qualified taxpayer to multiply a prescribed rate by the allowable square footage of the office instead of determining actual expenses.
The simplified option has a rate of $5 per square foot for business use of the home. The maximum size for this option is 300 square feet and has a maximum deduction of $1,500.
So, for example, let’s say you use 200 square feet of your home for business operations. The home office deduction using the simplified method would be $1,000.
While, in this example, the simplified method results in a larger deduction, that’s not always the case. It will depend on your specific expenses and which actually apply to the area of your home used for your business. For example, you can’t include repairs that were done to another part of the house.
Important considerations
Regardless of the method used, when filing for deductions for your home office, it’s important to note that you can’t deduct business expenses in excess of the gross income limitation.
It’s also important to consider the qualifications for a home office deduction when assessing your business use of your home. You’ll want to factor in depreciation and make sure you’ve kept detailed records, as eligibility might change from one year to the next.
This story was produced by Intuit TurboTax and reviewed and distributed by Stacker.
