Can I Deduct My Home Office?

Published October 2026 | By Ray Chowdhury, CPA & CTRC

The two tests

• Regular and exclusive use: the space is used for business on a regular basis and for nothing else. A desk in the corner of a guest room you also use for guests generally doesn't qualify.
• Principal place of business: it's where you primarily run the business, or where you regularly meet clients, or it's a separate structure used for business.

Who qualifies

Self-employed people, freelancers, and business owners who meet the tests. Employees who work from home for an employer generally can't claim it. If you're both, the deduction relates only to the self-employment work. See our freelance bookkeeping guide for setting up your records.

Two ways to calculate it

• Simplified method: $5 per square foot, up to 300 square feet ($1,500 maximum). Simple, with no depreciation to track.
• Regular method: a percentage of actual home costs, such as rent or mortgage interest, utilities, insurance, and repairs, based on the share of your home used for business. It can produce a bigger deduction but requires more records.

Either way, the deduction is limited by the income from the business that uses the space.

Keep the proof

Measure and photograph the space, and keep the bills you'd need for the regular method. Our guides on which receipts to keep and how long to keep records help.

Other deductions to pair with it

Home-based businesses often miss related expenses like business mileage from home to client sites, phone and internet, and equipment. Review our list of small business tax deductions.

Frequently asked questions

What is the simplified home office deduction?

An optional method that allows $5 per square foot of qualifying business space, up to 300 square feet, for a maximum deduction of $1,500. The usual eligibility rules still apply.

Can W-2 employees deduct a home office?

Generally no. Employees can no longer claim a federal deduction for a home office as an employee business expense.