Checkmark iconCan I Write This Off?

Can I write off my home office?

TL;DR

Yes, you can write off your home office if it is used exclusively and regularly for your business.

Detailed Answer

To write off your home office, it must be your principal place of business, a place where you meet clients, or a separate structure not attached to your home. You can't use the space for personal activities, it must be used exclusively for business. The deduction is based on the percentage of your home that the office occupies. For example, if your home office is 10% of the total square footage of your home, you can deduct 10% of your mortgage interest, property taxes, and utilities. You can also deduct depreciation of the portion of the home used for business. However, when you sell your home, you may have to pay tax on the amount you depreciated. There are also limitations on the amount you can deduct if your business has a loss.

Where to Put It on the Tax Form

You report this deduction on Form 8829, Expenses for Business Use of Your Home, which you submit with your Schedule C, Profit or Loss From Business.

Real World Example

For instance, if you are a freelance graphic designer and use a room in your home exclusively and regularly for your business, you can write off a portion of your home expenses, such as mortgage interest, property taxes, and utilities. The amount would be based on the percentage of your home that the office occupies.

Calculation Required

A calculation is required for this deduction.

To calculate the deduction, you need to determine the percentage of your home used for business. This is typically calculated by dividing the square footage of the office by the total square footage of the home. This percentage is then applied to eligible home expenses to determine the deductible amount.

Audit Risk & Documentation Tips

This deduction can increase your audit risk, so it's important to keep detailed records. Document the square footage of your office and your entire home, and keep receipts for all home expenses. If you're an employee, also keep records showing that you use the home office for the convenience of your employer.

IRS Reference

IRS Publication 587, Business Use of Your Home

Relevant Industries

FreelancersSmall BusinessConsultantsTelecommuters

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 3, 2025

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