3 Ways to Write Off Your Rent (If You're Self-Employed)

by
Kristin Disbrow, CPA
Updated 
September 21, 2022
April 15, 2022
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Is rent tax-deductible? Not for most people. If you're self-employed, though, rent can actually be a huge source of tax savings. You just need to treat it as a business expense.

Rent as a tax deduction is frequently misunderstood. Here's the bottom line: If you work for yourself — whether it's a full-time gig or a side hustle — rent is likely to be one of your biggest write-offs. Know how to use it, and you can maximize your tax savings while staying on the IRS's good side.

Wondering how? Here are 3 ways freelancers and business owners can use their rent as a tax deduction. We'll even show you where to claim in on your Schedule C, the form you'll use to write off your business expenses.

Contents

1. Take the home office deduction

📝 ​Where to claim it: Box 30 of your Schedule C

The home office deduction is a common source of tax write-offs for self-employed people. It lets you deduct a portion of your rent from your taxable income, turning your apartment into a partial write-off.

It's easy to see why this deduction is so powerful. Housing costs are high — chances are good that keeping a roof over your head is your biggest expense every month. 

Let's talk about who can take advantage of the home office deduction.

Who qualifies to write off their rent?

These days, only freelancers, independent contractors, and business owners who work from home can write off their rent. Consider it one of the perks of self-employment.

Before the Tax Cuts and Jobs Act of 2018, W-2 employees could also write off some WFH expenses. But now, you have to be self-employed to take advantage.

What are the rules for writing off your rent?

Just being self-employed isn't enough. It's hard to make a case that an Uber driver, for example, needs a home office: they do all their work out on the road. That's why the IRS came up with some rules for taking this deduction.

The easiest way to see if you qualify is taking our home office deduction quiz. In a nutshell, though, you'll be able to claim a home office as long as you have a workstation that:

  • Is regularly used for work
  • Is exclusively used for work
  • Is your principal place of business

Does a home office have to be a separate room?

No, your home office doesn't need to be a separate room. A corner in your bedroom can qualify — as long as you work there regularly, don't use it for other purposes, and treat it as the home base for your business activities.

This bit of flexibility in the tax code is a real plus for freelancers in high cost-of-living areas, who might spend enough on a tiny studio to pay for a two-bedroom apartment in a cheaper state. Luckily, a small desk in that studio would absolutely count as a home office!

How much of your rent can you deduct?

Here’s how to figure out how much of your rent you can write off:

  • 📏 Take the square footage of your workspace and divide by the square footage of your entire home. 
  • 💰 Multiply this by your monthly rent. That's how much you can write off per month.
  • 📅 Multiply that by the number of months you worked from home, that year, and you’ve got your full rent write-off.

(The first calculation you did is to find the business-use percentage of your home. The IRS uses it to make sure you can't write off the portions of the space that are only for personal use.) 

Here's an example of this calculation at work. If my office is 100 square feet, and my home is 1,000 square feet, my business-use percentage would be 10%. Let's say my rent is $1,500 per month. That lets me deduct $150 every month. If I used my office all year round, it’s $1,800 for the entire year. 

Voila! Now you've got a healthy tax deduction for payments you were already making every month.

How do you keep track of your home office expenses?

Getting to write off your rent makes the home office deduction one of the most powerful tax breaks for small business owners. The benefits don't end there. You can also deduct part of your utilities, Wi-Fi, rental insurance premiums, and other home expenses. (For more details on what you can write off, check out the guide on our home office quiz!)

Taking advantage of this tax break does mean some documentation on your end: you'll need to know how much you're spending on all these home expenses. Seeing your taxable income go down is worth it, but the recordkeeping can be rough — especially if your electricity and heating bills fluctuate every month.

If you don't want to DIY it with a home office deduction spreadsheet, give Keeper Tax a try. The app automatically finds recurring home office expenses for you — everything from your rent to your Wi-Fi bill.

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At tax time, you can file right through the app and claim those write-offs with a few clicks.

Using the simplified home office deduction instead

The Keeper Tax app can take the hassle out of the home office deduction. That said, if you don't want to keep up with your expenses at all, the IRS does give you another option: the simplified home office deduction. 

This method lets you deduct $5 for every square foot of your workspace. It'll leave you with a smaller tax deduction — just know that you're sacrificing savings for convenience. (To get a sense of how much you'd be leaving on the table, check out our guide to the simplified method vs. regular method for home office deductions.)

2. Rent a designated office space

📝 Where to claim it: Box 20b of your Schedule C

Not every freelancer has the desire — or the room — to work out of their apartment. If you pay for an office, studio, or coworking space, the rent for that is tax-deductible.

There's one important rule to keep in mind: if you deduct the rent for an external workspace, you can't also deduct part of your apartment rent. The IRS doesn't allow double-dipping like that.

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How much of your office rent can you deduct?

Unlike with a home office, an external workspace is 100% tax-deductible. After all, you're using 100% of it for business purposes.

Can you switch off between deducting your office rent and deducting your home rent?

Yes. Say you use an external office for part of the year, then lose access to it at some point (because you decided to stop paying for it). If you start working from home at that point, you can deduct your office rent for the months you used it and your home rent for the months you switched to WFH.

Just remember to keep detailed records of the rent you're paying for each office — including when you paid it. That way, you’ll be safe if the IRS ever wants to question your deduction.

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3. Pay for short-term lodgings during business travel

📝 Where to claim it: Box 24a of your Schedule C

Some freelancers and business owners travel a lot for work. If you find yourself far from home on a business trip, your travel expenses are fully deductible — and that includes what you’re spending on temporary accommodations.

You don't have to sign a lease to take this write-off. If you find a place to stay on Airbnb, Vrbo, or even Craigslist, feel free to claim the cost of your lodging.

When can you write off rent on a business trip?

The rules on work-related travel write-offs are pretty clear. If the purpose of the trip was for business, you can deduct the cost of your lodging, whether it's an Airbnb, sublet, or motel.

The IRS has some additional rules for determining whether your trip counts as work-related. You have to:

  • 🕰️ Work regular hours
  • 🗺️ Be at least 100 miles from home
  • 🗓️ Be gone for less than a year

For a detailed breakdown of these requirements, check out our article on business travel deductions.

Can you write off rent as a digital nomad?

For trips that start and end on a particular day, the rules above are simple enough. But what about digital nomads like influencers and content creators, who are constantly traveling from place to place?


Since this is new territory for the IRS, the rules and guidance are less clear. However, the tone right now seems to be “tough luck.”

Generally speaking, digital nomads can’t claim travel expenses since they don’t have a designated “tax home.” Unfortunately, this often extends to the home office deduction as well. 

If you plan on an extended stay abroad — like three to six months or longer in the same location — you can probably make a case for the home office deduction. But this is uncharted territory. Until someone ends up in Tax Court, we won’t know for sure what the IRS position on this is.

Luckily, there’s another — safer — option.

Writing off a WeWork membership abroad

More and more temporary office accommodations are becoming available to digital nomads in foreign locations. If you decide to spend a few months working abroad and sign up for a WeWork or Workbar membership, you can deduct those fees as rent.

This protects you from the IRS deciding that your Airbnb was, in fact, just a vacation home. The beauty of office space companies like WeWork is that there is no way they can be construed as a personal expense. This makes it a great option for digital nomads who take their work with them. 

At the end of the day, there's plenty of opportunity for self-employed people to turn their rent into a tax break. As with any tax deduction, it's essential to stay organized and keep up with what you're spending on rent throughout the tax year.

Use Keeper Tax to track your rent, and you can watch your tax bill go down without the hassle of spreadsheets or expense logs. Here’s to putting some of that rent back in your pocket!

Kristin Disbrow, CPA

Kristin Disbrow, CPA

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Kristin Meador is a Certified Public Accountant with over 5 years experience working with small business owners and freelancers in the areas of tax, audit, financial statement preparation, and profit planning. While she’s not hiking in the Smoky Mountains or checking out new breweries (@travelingcpachick), she’s working on growing her own financial services firm. Kristin is an advocate and affiliate partner for Keeper Tax.

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At Keeper Tax, we’re on a mission to help freelancers overcome the complexity of their taxes. That sometimes leads us to generalize tax advice. Please email support@keepertax.com if you have questions.