Home Office Deduction

Calculate the business use of home deduction for self-employed individuals who work from home. This flows to Schedule C Line 30 via Form 8829.

Do you qualify?

Two requirements must both be met:

Regular use — You use the space for business on a regular basis. Occasional or incidental use doesn't count. Working from home most days of the week qualifies. Working from home once a month does not.

Exclusive use — The space is used exclusively for business. This is the requirement most people fail. A spare bedroom used only as your office qualifies. A kitchen table where you also eat dinner does not. A room that doubles as a guest bedroom does not. A dedicated desk in the corner of a room can qualify if that area is used for nothing else — but the IRS interprets this strictly.

Exception to exclusive use: If you use part of your home to store inventory or product samples, and your home is the sole fixed location of your business, the exclusive use test doesn't apply to the storage area. Daycare facilities also have a partial exception.

Additional requirement for employees: If you're a W-2 employee working from home, the home office deduction is NOT available on your federal return since TCJA 2018 (some states still allow it). This deduction is only for self-employed individuals (Schedule C filers) and certain statutory employees.

Method 1: Simplified method

The easy option. No tracking of actual home expenses required.