Under the current law, you can only qualify for the home office deduction if you’re self-employed.
This wasn’t always the case. The law changed for 2018 through 2025 to eliminate the home office deduction for people who work for an employer.
If you’re an employee, your home office expenses are not tax-deductible – even if your employer closed the office and required you to work remotely.
Who Is Eligible for the Home Office Deduction?
Self-employed people can deduct home office expenses from their business income if their office qualifies.
To qualify for the home office deduction, you must use part of your home “regularly and exclusively” for business.
Your office doesn’t need to be in a separate room, but it has to be in an area of your home where you don’t do anything else.
The space must also be your principal place of business or a place where you meet regularly with clients or patients.
How Do You Calculate Your Home Office Deduction?
The Standard Option
With this method, you deduct your actual expenses. You can deduct 100% of some of your home office expenses, such as the cost to paint or make repairs to that specific area.
You can also deduct a portion of some overall house expenses based on the area of your home that you use as a home office. For example, if your home office is one-tenth of the square footage of your house, you can deduct 10% of the cost of your mortgage interest or rent, utilities (such as electric, water and gas bills) and homeowners insurance.
You can also deduct a portion of your property taxes and depreciation on the home. Those calculations are complicated, talk with a CPA .
The Simplified Option
Instead of keeping records of all of your expenses, you can deduct $5 per square foot of your home office, up to 300 square feet, for a maximum deduction of $1,500.
As long as your home office qualifies, you can take this tax break without having to keep records of the specific expenses.
How Do You Take the Deduction?
If you use the simplified method, you take the deduction directly on Schedule C reporting your business income and expenses.
If you choose the standard method, you must submit Form 8829 with your income tax return and then report the total deduction from your business income on Schedule C.
As always if you have questions about it as always, feel free to reach out to the Law Office of Jade Carpenter, and I would be happy to help! See you next time.
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