Various purchases for a home office can be deducted if they are listed as business expenses on Schedule C. While more people have been working from home, not everybody will be able to take advantage of the home office tax deduction. However, the standard method requires more in-depth work, requiring you to calculate all your actual expenses and keep a record of all receipts.įor both methods, the home office deduction can only be used if the portion of the residence is used exclusively and consistently for business purposes. While the simplified option may be easier, you could be losing out on some additional deductions by not using the standard method. With the simplified option, your home office square footage is multiplied by a predetermined rate set by the IRS. The standard method requires calculations using IRS Form 8829, Expenses for Business Use of Your Home, to deduct your home office expenses. How do you calculate the deduction?Ī home office deduction can either be calculated using the standard method or the simplified option. However, if you worked for an employer but also had a freelance side job or were temporarily self-employed, you can claim the deduction during the months you worked in those positions, although you must have some Schedule C income to be eligible.

According to CNBC, this tax break is for those who are self-employed, freelancers, independent contractors or gig workers.ĭue to the Tax Cuts and Jobs Act of 2017, those who work for an employer in W-2 positions are no longer eligible for the tax break.

However, there is no home depreciation deduction available for the years the simplified option is used. Additionally, with the simplified option, all home-related itemized deductions are claimed in full on Schedule A. With the simplified method, taxpayers receive a deduction of $5 per square foot used for home business, with a maximum of 300 square feet. In tax year 2013, the IRS introduced a simplified option to calculate the deduction for home offices, as opposed to their more in-depth regular method. What is the home office tax deduction?Ī home office tax deduction is a deduction that eligible workers can take if they have a dedicated in-home office space, which is strictly used for business. Now, at tax time, it’s important for workers to understand the home office tax deduction requirements and the specific deductions they may be eligible to take on their tax forms.

Over the past couple of years, COVID-19 has brought a work-from-home lifestyle to employees around the globe. Both your home office and its contents, such as computer equipment and office furniture, may make you eligible for tax deductions.

Using office home for business