Home office deduction for the self-employed
If you run your business from home, part of your housing costs may be deductible. The rules are strict about how the space is used, but the simplified method makes the math easy.
Key takeaways
- The space must be used regularly and exclusively for business, with a few exceptions.
- It must be your principal place of business, or a place you meet clients or a separate structure.
- The simplified method is $5 per square foot, up to 300 square feet, for a maximum of $1,500.
- The regular method uses Form 8829 and your actual expenses, including depreciation.
Who qualifies
Publication 587 sets two main tests. First, you use a specific area of your home regularly and exclusively for business. A desk in the corner of the guest room you also use for guests doesn’t pass; a dedicated room or clearly separated area can.
Second, the space has to be one of the following:
- Your principal place of business, including where you do administrative and management work if there is no other fixed location where you do it
- A place where you meet clients or customers in the normal course of business
- A separate structure not attached to your home, used for business
Storage of inventory or product samples and licensed daycare are exceptions to the exclusive-use rule. W-2 employees working from home generally can’t take this deduction under current law.
Simplified vs regular method
| Detail | Simplified | Regular (Form 8829) |
|---|---|---|
| How it’s figured | $5 × business square feet (max 300) | Business % × actual home expenses |
| Maximum | $1,500 | No fixed cap; limited by business income |
| Depreciation | None | Yes, on the business part of the home |
| Record-keeping | Square footage and use | Every home expense, plus square footage |
| Carryover of unused amount | No | Yes |
The regular method usually wins for larger spaces or high-cost housing. Depreciation claimed under it can be recaptured when you sell the home, so weigh that with your tax preparer.
Mortgage interest and property taxes you don’t use for the home office may still be deductible as itemized deductions on Schedule A.
The overlooked benefit: business miles
When your home office is your principal place of business, trips from home to clients, suppliers, and job sites are generally business trips rather than commutes. For many self-employed people that is worth more than the home office deduction itself. See the mileage log guide.
Frequently asked questions
Can I take the home office deduction if I rent?
Yes. Under the regular method, the business percentage of your rent is deductible along with utilities and insurance. The simplified method works the same for renters and owners.
Does a kitchen table count?
Usually not. A space you also use for meals or family life fails the exclusive-use test.
Can I switch methods each year?
Yes, you can choose either method each year.
Sources
This guide is general information for U.S. federal taxes, current as of October 21, 2026. It isn’t tax, legal, or accounting advice. Talk to a qualified professional about your situation.
Keep the records
this guide asks for.
spentr captures receipts, business miles, and rental hours as they happen, so they’re ready when you file.