What Is the Home Office Deduction and How Do I Qualify?
If you run a business or work as a freelancer from home, you may be able to save money on your taxes using the home office deduction. This deduction allows you to write off a portion of your home expenses, like rent and utilities, if you use part of your home exclusively for business.
What Is the Home Office Deduction?
The home office deduction lets self-employed individuals deduct business use of their home from their taxable income. This applies whether you own or rent your home.
Important: This deduction is generally not available to W-2 employees, even if you work remotely, unless you’re working under very specific contractual conditions.
Do I Qualify for the Home Office Deduction?
You must meet two key requirements:
- Regular and Exclusive Use
A specific area of your home must be used only for your business. It doesn’t have to be a full room, but it can’t be a shared space like your kitchen table.
Example: If you’re a freelance designer in Los Angeles and you’ve set up a desk in your guest room just for work, you may qualify.
- Principal Place of Business
Your home must be your main place of business, or the place where you meet clients or do administrative work—even if you occasionally work elsewhere.
Example: A self-employed therapist who sees clients virtually from a home office could qualify.
What Can You Deduct?
If you qualify, you can deduct a percentage of expenses such as:
- Rent or mortgage interest
- Utilities (electricity, internet)
- Property taxes
- Home insurance
- Maintenance and repairs
Two Ways to Claim the Deduction
- Simplified Method
- Deduct $5 per square foot of your home office (up to 300 sq. ft).
- Maximum deduction: $1,500
- No need to track actual expenses.
- Regular Method
- Calculate the percentage of your home used for business.
- Deduct a portion of actual home expenses.
- More work, but often a larger deduction.
Example:
You use 10% of your home (100 sq. ft of a 1,000 sq. ft apartment) exclusively for your online consulting business. If your total home expenses are $24,000/year, you may deduct around $2,400 using the regular method.
Don’t Risk an Audit — Work with a Pro
The home office deduction is helpful—but it’s also something the IRS watches closely. A qualified Tax Advisor Los Angeles or CPA Los Angeles can help you document everything properly and avoid mistakes.
Let Velin & Associates, Inc. Help You Claim What You Deserve
Many self-employed professionals, freelancers, and small business owners in LA overlook the home office deduction—or get it wrong. We’re here to make sure you get it right. For more information about our services, please visit our website.
Velin & Associates, Inc
8159 Santa Monica Blvd STE 198/200 West Hollywood, CA 90046
323-902-1000
dmitriy@losangelescpa.org
Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.