Two myths keep people from a legitimate deduction: that it is an automatic audit flag, and that it is too complicated to bother with. Neither is true if you qualify.
Who actually qualifies
The deduction is for self-employed people and business owners, not employees who work from home for someone else, that group lost the deduction under current law. If your income comes on a 1099 or from your own business, keep reading.
The space has to be used regularly and exclusively for the business. A spare room that is your office and nothing else qualifies; the kitchen table you also eat at does not.
Two ways to calculate it
The simple method multiplies your office square footage by a set rate, up to a cap. It takes minutes and requires almost no records, which makes it the right choice for most people.
The regular method deducts the actual percentage of your home’s costs, rent or mortgage interest, utilities, insurance, that the office represents. It can be worth more but needs real records and more effort.
Is it an audit flag?
A correctly claimed home office is not a red flag. What draws scrutiny is a deduction that does not match the rest of the return, like a huge office relative to a tiny business.
Keep it honest and documented: a photo of the space, your square-footage math, and the bills behind it. A legitimate deduction you can support is nothing to be afraid of.
- →It is for the self-employed, not remote employees.
- →The space must be used regularly and only for the business.
- →The simple square-footage method is enough for most people.