A lot of contractors are afraid to claim the home office deduction because they think it requires having a separate room in their home dedicated to work. But what about those of us who don’t have extra rooms to spare in our apartments? Turns out, a lot of contractors can still claim this tax write off even if they don’t have an extra room and spend a lot of time outside of the house.
The IRS only has two rules for determining whether you can write off expenses related to your home office:
- You don’t commute to an office for work. Unless you’re renting an office space, or your 1099 employer provides one, you qualify.
- There’s a place in your apartment / house where work, and not much else. Whether that’s a small desk in the corner of your bedroom, or an actual separate room - it counts! It’s okay to take a personal call every once in a while from this space, but it shouldn’t be the couch in your living room where you watch movies with friends.
Let’s do some examples.
Example #1 - you have a full-time job, but also do some online ESL tutoring work. When you do online tutoring, you use a big monitor at a dedicated desk in your living room. That counts.
Example #2 - you’re a rideshare and delivery driver. You’re constantly trying to find better gigs and comparing your hourly pay on different platforms. You do that work from an otherwise unoccupied desk in your bedroom. That counts.
Example #3 - you’re a real estate agent. You pay desk fees at a real estate brokerage. You commute there every workday. Even if you work from home sometimes, that doesn’t count.