Home Office Tax Deduction for Self Employed (What Can You Deduct?)

Understand and calculate home office tax deduction for self employed individuals who work from home; read on to learn more.

Learn how to calculate your tax deduction for using your home as your office. Read below for details.

You likely qualify for a home office tax deduction if you work from home as a 1099 contractor, freelancer, or self employed. This tax deduction is available to those that rent or own their home. In this post learn more about the home office tax deduction for self employed and how to calculate it. Read on to learn if you qualify.

How Do I Qualify for a Home Office Tax Deduction?

According to the IRS there are two requirements that must be met for your home to qualify for a home office and for you to take a home office tax deduction.

  1. You use the area in your home dedicated to your home office regularly and exclusively for your home office. For example, if you regularly use your a guest room in your home for your office, and you exclusively use it for your office, you can take the home office tax deduction.
  2. Your home office is the principle place for your business. You possibly qualify for the self employed home office tax deduction if you do business at another location but use your home office substantially more.

How to Calculate Your Home Office Tax Deduction

There are two ways to calculate the amount of your home office tax deduction.

  1. Simplified Method
    This method has been available since the tax year starting Jan 1st 2013.
  2. Actual Expense Tax Deduction

Simplified Home Office Tax Deduction vs Actual Expense Tax Deduction

Check out this article on the IRS website for more information on Simplified Home Office Tax Deductions, Simplified Home Office Tax Deduction.

A Note About the 2017 / 2018 Tax Cut and Jobs Act

Many self employed individuals are discouraged to take the home office tax deduction. This is because they feel not only that they are not entitled to it, but that it will trigger an audit. Further, these feelings are particularly apparent since the 2017 / 2018 Tax Cut and Jobs Act. However, this is not true, read on to find out why.

The 2017 Tax Cut and Jobs Act only applies to W2 employees. Self employed individuals, freelancers, independent contracts and 1099’s are not W2 employees. The home office tax deduction is available to you if you are one of these.

Check out this detailed article for more information about the 2017 and 2018 Tax Cut and Jobs Act, 2018 Tax Cuts & Jobs Act Overview.

Frequently Asked Questions About Home Office Tax Deduction

If I rent my home and work from home, can I deduct part of my rent as my home office tax deduction?
Yes. You can deduct part of your rent as a self employed home office tax deduction if you use only part of your home for work.

If I sometimes work from home and sometimes work from an office, do I qualify for the home office tax deduction?
Yes. You qualify for the home office tax deduction if you work from your home office a majority of the time.

Resources

IRS: Small Business Self Employed Home Office Deduction

IRS: Simplified Options for Home Office Tax Deduction

About Falcon Expenses

Falcon Expenses is an iOS solution for expense tracking and management. Scan receipts, we type merchant, date and amount, auto-track mileage expenses via GPS and log billable hours with an integrated timer. Quickly organize expenses by time period, project or client and easily prepare reports for email to anyone in PDF or spreadsheet formats, all from your phone. Use for reimbursements, taxes, record keeping or invoicing. Falcon Expenses is great for professionals, freelancers, realtors, business travelers, truckers and more. Find out more, here.

Check out the following articles to learn more about Falcon Expenses products and services and start saving time and money today:

You may also like...