How Do I Qualify for the Home Office Deduction?

If you use part of your home for business purposes, you may be eligible for the home office deduction, which can significantly reduce taxable income.

1. Who Qualifies for the Home Office Deduction?

You must use part of your home exclusively and regularly for business. This applies to:

• Self-employed individuals

• Freelancers and remote workers

2. How to Calculate the Deduction

The IRS offers two methods:

• Simplified Method: Deduct $5 per square foot (up to 300 square feet, or a max of $1,500).

• Actual Expense Method: Deduct a percentage of rent/mortgage, utilities, property taxes, and maintenance based on the home office’s size relative to your home.

3. Common Expenses You Can Deduct

• Mortgage interest or rent (proportionally)

• Utilities and internet

• Home repairs and maintenance (related to the office space)

4. Special Considerations

• Employees cannot claim the home office deduction unless they are self-employed.

• The workspace must be used exclusively for business purposes.

Final Thoughts: The home office deduction can lower tax liability for self-employed individuals. If you're unsure which method to use, consult a tax professional to maximize your deductions while staying compliant.

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