Home office deduction
checklist
🏠 There are two ways to claim the home office deduction:
🧾 Method 1: Actual Expense Method
This method allows you to deduct a portion of your actual home expenses based on the percentage of your home used exclusively for business.
Direct Expenses
Costs that apply only to the home office (e.g., office-specific repairs, furniture, supplies)
Indirect Expenses
A percentage of general home expenses, such as:
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Mortgage interest or rent
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Utilities (electric, water, gas)
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Homeowners insurance
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Repairs and maintenance
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Property taxes
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Depreciation (if you own your home)
📏 Method 2: Safe Harbor Method
A simplified option that requires less recordkeeping:
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Deduct $5 per square foot of office space used regularly and exclusively for business
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Maximum of 300 square feet, or up to $1,500 total
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No need to calculate percentages or track individual home expenses
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Depreciation is not allowed under this method
Record-Keeping Tips
Regardless of the method:
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Keep receipts and documentation of all eligible expenses
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Maintain records showing your home office meets IRS use requirements (regular, exclusive, principal business use)
Note: Choosing the right method depends on your actual home costs, office size, and preference for simplicity versus maximizing your deduction.
Consult your tax advisor to determine which option is best for your situation.