Home Office Deduction for the Self-Employed

Not tax advice. This page is general information about the home office deduction for self-employed people. Rules depend on your facts and the tax year. Confirm with a qualified tax professional before you claim anything.

Self-employed people ask one question first: can I deduct the room where I actually work? Often the answer turns on two tests — regular use and exclusive use — and then on which method you use to compute the number. Track that number beside your other Schedule C expenses instead of reconstructing it in April.

Who qualifies?

At a high level, self-employed people (sole proprietors and disregarded single-member LLCs filing Schedule C) may claim a home office deduction when part of the home is used regularly and exclusively for the business — commonly as the principal place of business, or for other uses the IRS treats as qualifying. W-2 employees are in a different rule set and should not assume this page applies to them.

Qualify the space before you multiply any rate. A laptop on the kitchen table is not automatically a home office.

Simplified method vs actual expenses

Two ways to compute the deduction show up over and over:

• Simplified method. A prescribed dollar amount per square foot of qualifying space, up to a square-footage cap. Less to allocate, fewer home bills to split. The IRS publishes the rate and the cap; confirm both for the tax year you are filing. The longstanding prescribed rate has been $5 per square foot up to 300 square feet. Do not treat a blog as the source of the current figure.
• Actual expenses. Your business-use percentage (office square feet ÷ whole home) applied to eligible home costs — plus direct costs that belong only to the office. More record-keeping, and sometimes a larger deduction. Depreciation of the home can enter the picture, which is a reason to involve a preparer.

Run both with your own numbers if you are deciding. The Freelancer Expense Tracker and the Self-Employed Expense Tracker include home office calculators for that comparison. Neither calculator is tax software.

What exclusive and regular use means

Exclusive means that space is used for the business, not also as a guest room, a family office-and-homework hybrid, or storage for everything you own. Regular means the use is ongoing, not a desk you cleared once for a deadline.

A dedicated room is the clean version of the test. A clearly separated area can still qualify when the facts support it. “I sometimes answer email on the couch” does not.

What records to keep

Write these down when you set the space up, then keep the bills:

• Square footage of the office and of the whole home.
• Which method you used for the year.
• Photos or a simple floor sketch, so “exclusive” is not a memory.
• For the actual method: rent or mortgage interest, utilities, insurance, and repairs, with what was direct to the office vs shared by the home.
• The resulting deduction amount, stored with the rest of your expense records.

How it shows up near Schedule C

The home office deduction sits with your other business expenses. It is not a line you invent inside “rent” for a spare bedroom you also live in. On the Schedule C expenses worksheet, keep the home office result visible next to Part II category totals so your preparer sees one packet: categorized spending plus the home office support.

The category-by-category tracking guide is Schedule C expenses for freelancers.

Track it next to your other expenses

There is no separate home office spreadsheet in this cluster. Use a tracker you already have:

• Freelancer Expense Tracker — home office calculator, mileage, and Schedule C categories.
• Self-Employed Expense Tracker — the same job for sole props and gig work.
• Schedule C expenses worksheet — Part II totals, with a place for the home office result beside them.

Avery Pro brings accounts, expenses, invoices and reports together in the mobile and web apps. Business adds recurring invoices, payment reminders and advanced bookkeeping tools. If you prefer a spreadsheet workflow, Avery for Google Sheets imports transactions from supported accounts, with categories and rules for you to review. Compare the plans. The free template also works with manual entry.

A 1099 write-offs hub is planned at /blog/1099-write-offs-and-deductions and is not on main yet.

Not tax advice

Again, plainly: this is general information, not tax advice — confirm with a qualified tax professional. The IRS pages on business use of your home and the simplified option are the primary sources for tests, rate, and cap. Avery’s templates organize records. They do not decide whether your space qualifies or which method you should elect.