Can I claim the home office deduction for taxes?

QUESTION 1

Do you have 1099 income?

This includes any freelancing, small business, and self-employment income over $600 / year.

QUESTION 2

For your 1099 work, do you commute to an office?

If you already have an office space that you have to pay for, then select “No”.

QUESTION 3

Do you work from home regularly ?

Think specifically about your 1099 work.

QUESTION 4

Do you have a dedicated workstation at home?

Only select yes if you work from home at least once per month.

Bummer!

You don’t qualify for a home office. However, you can still claim plenty of other write-offs, and you should download Keeper Tax.

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CONGRATS!

You can claim home office write-offs!

Start over

Find write-offs.
File taxes.

Keeper Tax helps independent contractors and freelancers discover tax deductions and file taxes.

try free →

Here are some examples of tax write-offs you can claim:

Home office furniture

A desk, chairs, lamps, and other home office necessities are all tax write-offs.

Wi-Fi bill

Your Comcast bill is a tax write-off. You need internet to do your job!

Property insurance

Whether you pay rent or own your home, a portion of it is tax-deductible.

Power bill

Gotta keep the lights on in your home office! A portion of your electricity bill counts.

Water bill

It'd be hard to work in an office without running water, huh? You water bill counts.

Part of your rent

Whether you pay rent or own your home, a portion of those expenses is tax-deductible.

The home office deduction is a valuable, accessible, and sadly misunderstood tax write-off.

As a 1099 contractor or self-employed worker, operating business from home has a major perk: you can claim a portion of all home-related expenses as a write off on your taxes!

As long as you work from a dedicated workstation, and it's your principal place of business, you can claim business use of your home or home-related expenses as (partial) tax write-offs at tax time. You don't even have to use this space as a traditional office — it can be a studio, or even a home gym where you see personal training clients.

Misled by rumors of increased likelihood of audit, many hard-working freelancers fail to claim what’s rightfully theirs when they track their business expenses.

What are the IRS requirements for the home office deduction?

If you work from home as a freelancer, 1099 contractor, or self-employed person, then you most likely qualify. You don’t need a dedicated mahogany-clad room with a fancy placard on the door to label an area as business use of your home either.

The IRS publication defines a home office as a portion of your home used exclusively and regularly as your main place of work. Let’s clarify this.

Find out if you qualify for the home office tax deduction by following the arrows in this diagram!

1. Doesn’t have to be a separate exclusive use room — a desk counts

A home office doesn’t need to only be writing off a separate room or area of your home. For many of us living in urban areas, that’s not really an option anyway. A desk in your bedroom or living room that's only for business use counts. But don’t claim  the couch or your bed as a home office. Those pieces of furniture are clearly not used “exclusively” for business activities.

2. Should be used for business use (at least) weekly

You don’t need to be a social recluse who never leaves the house in order to claim the home office deduction. You’re welcome to work from coffee shops and visit client sites and meetings, as long as you use your home workstation weekly. 

For example, if you’re a real estate broker constantly running between open houses and answering emails on your phone, you can still claim a home office, since you use it for computer work every week for business use. However, if you're a delivery driver, you'd often have little need for computer work, and using your workstation a few times a year to organize expenses doesn’t count as regular use.

3. Doesn’t have to be used continuously throughout the year

If you only work from home for a few months out of the year, you can — and should — deduct expenses for those months. Take COVID-19 as an example. Because of the pandemic, almost every freelancer in should have been able to claim a home office for at least part of 2020. After all, for most people, your home was probably your principal place of business.

If you normally work from a coworking space but started working from home in April, then you can claim the home office deduction from your self-employment income beginning in that month.

4. Can’t be claimed alongside office space expenses

Unfortunately, you can’t claim a studio lease or co-working space fees alongside a home office. You’re free to claim a home office one month and then a coworking membership the next — just not both in the same month.

What home office expenses can you write off?

Having a home office allows you to write off a percentage of all home-related expenses: rent, utilities, and even some types of home consumables. This can be extremely valuable business deductions-- even worth up to thousands of dollars, depending on how much you pay for housing.

To calculate this percentage, you’ll need to estimate the square footage of your workstation and divide it by the total square footage of your home.

For example, a medium-sized desk and some surrounding area for a desk chair is about 10 ft x 8 ft. If you have a 500 sq foot home, that means you can write off (80 sq ft) / (500 sq ft) = 16% of all your home expenses.

Great, now let’s figure out what a home office allows you to write off for your small business!

🏠 Rent

With the cost of rent these days, this tax break is huge! A percentage of your monthly rent payment is tax-deductible for every month you claim a home office. With the cost of urban rent these days, this write-off can be extremely valuable! 

🌪️ Insurance

If you pay for renters or homeowners insurance, write off a percentage of the monthly bill thanks to your home office. After all, that insurance helps to protect your workstation. You can write off the cost of insurance that covers the business-use part of your home.

🚰 Utilities

Things like electricity, gas, water, and trash removal are usually personal expenses and cannot be written off. Although they may feel like indirect expenses, you can now write off a portion of these costs if you have a home office.

🧻 Home essentials

Home essentials like cleaning supplies, soap — and, yes, even toilet paper — are partially tax-deductible. Think about it this way: If you weren’t working from home, you wouldn’t need to use up nearly as much of your toilet paper for personal use.

🪑 Home office furniture

The cost of a desk, chair, monitor, and other furniture for your workstation is fully tax-deductible. You don’t need to take a percentage of these expenses, since they’re used exclusively for business activities.

🧹 Cleaning

Do you have a professional clean your home? Even if they clean the entire home (including your workspace), it counts! A portion of this expense can be written off and should not be missed.

🌐 Wi-Fi bill

This is a must. It would be hard to do any kind of modern work from home without wifi. Don’t forget to claim it on your taxes! Wi-Fi is certainly a necessity for working out of your home. Claim your monthly Comcast bill on taxes!

☎️ Telephone

This one is a lot less common these days, but if you have a landline, a portion of that can be written off. Perhaps you also have a second dedicated business-use line, you may write off that entire amount as actual expenses.

🛠️ Home repairs and maintenance

Some common repairs are painting, patching walls and floors, roof repairs, wallpapering, gutter repairs, fixing leaks, broken windows. Keep in mind, if these repairs are done exclusively in your home office, you can write off the entire amount! If they are done to the full home, like a roof repair, then you’ll get a partial write-off.

🛡️ Security system

If you have a security system that protects your home, like ADT, or cameras for monitoring it, like Ring or Nest, be sure to include those as well.

↘️ Home depreciation, property taxes, mortgage interest

If you own a home, this will be another hefty write off for you. Instead of rent, you can write off a percentage of your home depreciation, property taxes, and mortgage interest.

Include the total amount spent on your home mortgage interest for the year. and your software will calculate your portion of the write-off! This info will be found on your Form 1098 from your bank.

Don’t worry about crunching the numbers yourself — great tax filing software like Keeper Tax does the recordkeeping and math for you at tax time. All you will have to know is the amount you bought your place for and when you purchased it. Our software will take care of the rest: just plug in the numbers for your tax return. If you are still uncertain, contact a tax professional.

What about the “simplified” home office deduction?

In the 2013 tax year, the IRS started offering a simplified option to calculate home office tax savings, apart from the regular method. In short, instead of getting to deduct a percentage of all your home-related expenses, you can choose to claim a standard deduction of $5 per square foot.

Unfortunately for most freelancers and small business owners, the deducting per square feet option tends to be significantly less valuable. Tax nerds should check out our simplified method vs actual scenario-level breakdown.