What You Need to Know
Can You Claim the Home Office Deduction?
If you are self-employed, own a small business, freelance, or operate a side business from home, you may qualify for the home office deduction.
To qualify, the IRS generally requires that part of your home be used:
- Regularly for business
- Exclusively for business purposes
- This could include a dedicated office, workspace, or room used to manage your business operations.
NOTE: Most W-2 employees working remotely do not qualify for the federal home office deduction under current tax law.
Two Ways to Calculate the Deduction
Simplified Method
- $5 per square foot
- Up to 300 square feet
- Maximum deduction: $1,500
Actual Expense Method
You may deduct a percentage of actual home expenses such as:
- Rent or mortgage interest
- Utilities
- Internet
- Insurance
- Repairs and maintenance
The percentage is based on how much of your home is used for business.
Documentation Matters
If you claim the deduction, keep:
- Photos of the office space
- Measurements or square footage
- Utility and internet bills
- Mortgage or rent statements
- Records showing business use
At Barklee Financial Group, we can help business owners determine whether they qualify for the home office deduction and how to properly document it.
For more details directly from the IRS, see:
