Tax deduction guide

Home office deduction: who qualifies and how much

Tax year 2026 · Updated October 15, 2026

When it counts

  • Exclusive use. A room or a clearly separate area used only for the business. Not a guest room, not family space, not the kitchen table.
  • Regular use. You use it for the business on an ongoing basis, not now and then.
  • Principal place of business. You do your administrative and management work there, and you have no other fixed place where you do much of that work. A space where you regularly meet customers, or a separate structure on your property used only for the business, can qualify too.
  • Simplified method. $5 per square foot of office, up to 300 square feet. You only need the measurements.
  • Actual expense method. Your office's share of rent or mortgage interest, real estate taxes, insurance, utilities and repairs. If you own the home, it also includes depreciation on the office share, which can be taxed when you sell the home. The deduction cannot be more than your business income, and you need records of each cost.
  • You pick the method for each tax year. With the simplified method you do not also deduct actual home costs.
  • It goes on Schedule C, line 30. The actual method also uses Form 8829.

When it doesn't

  • A shared space. A den the family also uses does not pass the exclusive use test. A desk or monitor you buy for the space can still be checked on its own.
  • Occasional use.
  • Your main business is somewhere else. Then the space counts only if you meet customers there, or it is a separate structure used only for the business.
  • You own an S or C corporation. You use the office as an employee of your company, and an employee cannot deduct home office costs on their own return. Your company can reimburse you under an accountable plan, and then the company deducts it.
  • A mortgage payment's principal. Only the interest counts.
  • There are two narrow exceptions to exclusive use: storing inventory or product samples, and running a daycare.

A worked example

Your office is 150 square feet, in a home that is 1,500 square feet. Your home costs $24,000 for the year.

  • Simplified method: 150 sq ft times $5 = $750.00
  • Actual method: 150 divided by 1,500 = 10% of your home, and 10% of $24,000 = $2,400.00

The actual method gives more here. It also needs records for every bill, it is limited by your business income, and for a home you own it adds depreciation that can be taxed when you sell. The simplified method needs only the measurements.

What records to keep

  • The square feet of your office, and of your whole home if you use the actual method.
  • Proof of how the space is used: only for business, and regularly.
  • For the actual method, your rent or mortgage interest, real estate tax, insurance, utility and repair records.
  • Which method you used each year.

Common questions

Can I switch between the two methods?

Yes. You choose each year. Once you choose for a year, that choice is final for that year, and next year you can pick the other one.

What about my internet bill?

The business share of your internet service is claimed as a business utility, not through the square footage calculation. See the home internet guide.

Do I have to work from home every day?

No. What matters is how you use the space: regularly, and only for business.

Sources

Also cited by the WriteOff rules: 26 U.S.C. section 280A.