Home Office Deduction

If you use part of your home to conduct business, you may be able to deduct certain expenses for use of your home. This deduction is available for both homeowners and renters.

The deduction is available to self-employed taxpayers and independent contractors. However, it is suspended for employees through 2025 even if they currently work from home.

Requirements to claim the deduction:

- Regular and exclusive use: A portion of the home must be used exclusively for conducting business on a regular basis

- Principal place of your business: The home must be the taxpayer’s principal place of business or the location where administrative or management activities are conducted when there is no other suitable location.

Deduction Calculation:

- Deductions are based on the percentage of the home devoted to business use and include real estate taxes, mortgage interest, rent, utilities, home insurance, maintenance and repairs. Expenses for parts of the home not used for business (such as lawncare) are not deductible.

- Tax payers can also use a simplified option: a rate of $5 per square foot for business use, up to a maximum of 300 square feet ($1,500).

Remember to keep good records and consult with a tax professional to ensure accurate reporting.