The Home Office Tax Deduction: Who Qualifies and How to Claim It

The short answer

If you are self-employed and part of your home is used regularly and exclusively for business, you can deduct a home office. The deduction is real and legitimate; the two things that trip people up are the exclusive-use rule and which calculation method to use. W-2 employees generally cannot claim it for 2018 through 2025.

Who qualifies

Two tests matter. First, regular and exclusive use: the space has to be used only for business, on a regular basis. A spare bedroom set up as an office qualifies; the couch where you sometimes answer email does not. Second, it generally has to be your principal place of business, or a place you regularly meet clients. Freelancers, contractors, and small business owners typically qualify; employees working from home for someone else generally do not, because that deduction is suspended through 2025.

The two ways to calculate it

The simplified method multiplies your office square footage by a flat IRS rate, up to a 300-square-foot cap, so there is nothing to itemize. The actual-expense method takes the business-use percentage of your home (office square footage divided by total) and applies it to real costs: rent or mortgage interest, utilities, insurance, and repairs. The actual method takes more record-keeping but is often larger, especially with higher housing costs. You can pick whichever is better each year.

What you need to keep

For the simplified method you mainly need the square footage. For the actual method you need the year's home expenses and proof of them, which is exactly where records slip. Keep utility bills, insurance statements, and repair receipts, and hold them as long as you keep any deduction record; see how long to keep receipts. The home office is one write-off among many, so it helps to see the full picture in what you can write off on your taxes.

The faster way: let Mylo keep the proof automatically

This is where Mylo quietly does the heavy lifting. It works in the background to capture every receipt from your inbox and the stores you shop at, matches each one to the card charge that paid for it, and files it as a categorized expense, so when you claim the home office the proof is already there. No new card and no manual entry: Mylo works on top of the Visa, Mastercard, or Amex you already use, and syncs clean, categorized expenses to QuickBooks. Free for individuals on iOS, Android, and the web; teams are $9/user/mo (30-day free trial).

Sources: IRS guidance on the home office deduction (Publication 587). This article is general information, not tax advice. Rules change and situations differ, so check with a qualified tax professional for your situation.