Who can claim the home office deduction?

Sole proprietors, single-member LLCs, and other self-employed taxpayers who use a dedicated area of the home exclusively and regularly for business can claim it under IRC §280A(c)(1). Employees working from home cannot — the TCJA suspended that path through 2025 and a remote-worker carveout remains narrow.

How do I calculate the home office deduction — actual vs simplified method?

The actual method deducts the business share of utilities, rent, insurance, and depreciation based on square footage. The simplified method caps at $1,500 ($5 per square foot, 300 sq ft max). Most sole proprietors who have full rent or mortgage records get a larger deduction via the actual method.

Does my home office have to be a separate room?

No. The space only needs a clearly identifiable area used exclusively for business — a partitioned corner of a room qualifies if it is separated and used solely for the trade. Mixed personal use on the same surface disqualifies it.

What is the exclusive-use test under §280A(c)(1)?

The space must be used exclusively for the trade or business — not for personal activities, not as a guest room, not as a kids’ homework area. Occasional personal use of the same physical surface is enough to lose the entire deduction.

Where do I claim the home office deduction on my return?

Sole proprietors claim it on Schedule C line 30 (Form 8829 flows into it). Independent contractors with $5M+ revenue or itemized allocations use Form 8829 directly. Employees do not have a place to claim it on a federal return post-TCJA.

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Home office deduction

How to claim the home office deduction: IRC §280A guide

Step-by-step home office deduction guide for sole proprietors and the self-employed. Square-footage vs simplified method, exclusive-use test, Schedule C line, IRC §280A(c)(1) rules.

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Citation backbone

This article rests on the IRC section below — every recommendation Taxerity.AI surfaces cites this same scaffolding.

IRC § 280A(c)(1)

Who can claim this

Who qualifies for the home office deduction

Sole proprietor using a dedicated room of the home exclusively and regularly for the trade or business.

Square-footage allocation recorded on Schedule C line for utilities + rent, redacted to the nearest 5 sq ft.
P&L carries a separate HomeOffice cost line that ties to the schedule C worksheet for the tax year.
No mixed personal use on the same utility or rent line — exclusive-business-use test satisfied.

How to claim — step-by-step

How to claim the home office deductionon this year's return

Square-footage allocation recorded on Schedule C line for utilities + rent, redacted to the nearest 5 sq ft.
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P&L carries a separate HomeOffice cost line that ties to the schedule C worksheet for the tax year.
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No mixed personal use on the same utility or rent line — exclusive-business-use test satisfied.
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What catches practitioners off guard

The risk to review

Why AI + human review matters here

The exclusive-use test is the failure mode — a home office used for anything personal disqualifies the deduction under §280A(c)(1).

Taxerity.AI surfaces this and similar items for your firm's reviewer. The AI does the research; you keep the final judgment on whether the workload and evidence pattern warrant the deduction on a specific client's return.

FAQ

Common questions about the home office deduction

Quick answers to the questions solo CPAs and enrolled agents ask us most often about this deduction.

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