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Is if i work from home can i deduct rent a business expense?

TL;DR

If you work from home, you may be able to deduct a portion of your rent as a business expense under the home office deduction, provided you meet specific IRS requirements for exclusive and regular use.

Detailed Answer

To deduct rent as a business expense when working from home, you must use part of your home exclusively and regularly as your principal place of business or as a place to meet clients. The space must be used solely for business activities, and the deduction is calculated based on the percentage of your home used for business. For example, if your home office occupies 10% of your home's total square footage, you can deduct 10% of your rent. This deduction is available to both homeowners and renters. However, if you are an employee, you generally cannot claim this deduction unless you are self-employed. It's important to note that the simplified option allows a deduction of $5 per square foot of home used for business, up to 300 square feet.

Where to Put It on the Tax Form

Schedule C, Line 30 for self-employed individuals. If using Form 8829, report on Line 35 and carry to Schedule C, Line 30.

Real World Example

A freelance graphic designer rents a two-bedroom apartment and uses one bedroom exclusively as an office. The office is 200 square feet, and the apartment is 1,000 square feet total. The designer pays $1,500 in monthly rent. They can deduct 20% of their rent ($300) each month as a business expense.

Calculation Required

A calculation is required for this deduction.

Calculate the percentage of your home used for business by dividing the square footage of your home office by the total square footage of your home. Multiply this percentage by your total rent to determine the deductible amount.

Audit Risk & Documentation Tips

Moderate audit risk. Keep detailed records, including a floor plan showing the dimensions of your home and office space, rental agreements, and any correspondence related to your business activities. Maintain a log of business activities conducted in the home office to demonstrate regular use.

IRS Reference

IRS Publication 587, Business Use of Your Home (Including Use by Daycare Providers).

Relevant Industries

FreelancersConsultantsRemote WorkersGraphic DesignersWriters

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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 15, 2025

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