Since 2017, employees have not been eligible to take an itemized deduction for a home office. The Tax Cuts and Jobs Act suspended all miscellaneous itemized deductions for tax years 2018 through 2025. That deduction is scheduled to go into effect in 2026. Self-employed individuals can deduct office expenses on Schedule C, Form 1040. The home office deduction includes typical office-connected expenditures such as supplies, postage, computers, printers, and all the other ordinary and necessary expenses a person would have in connection with running a home office. The home office tax deduction for the self-employed would cover expenses for the business use of a home, which includes mortgage interest, rent, insurance, utilities, repairs, and depreciation. This program discusses many of the most important issues relating to the deductibility of home office–related expenses.
Learning Objectives
- Understand the rules relating to taxpayers who are entitled to deduct expenses associated with a home office
Major Topics
- Calculating the home office deduction
- Actual expense method
- Simplified expense method
- Definition of a home for purposes of the home office deduction
- Whether working-from-home employees can claim a home office deduction
- What is a “separate, identifiable space?”
- The “regularly and exclusively used” rule
- Defining a “principal place of business”
- Meeting clients, patients, and customers
- More than one trade or business
- Special rules that apply to daycare providers
- Separate, free-standing structures
- Depreciating the home
