Work From Home? Read This Before Claiming the Home Office Tax Deduction
David McMillin
6 min read
Reza Estakhrian/Getty Images
Remote work has radically changed our conception of "the office." The Pew Research Center estimates that 14% of all employed adults over 18, or roughly 22 million people, are currently working from home all the time.
If you're a remote worker filing your taxes, however, you might not be eligible to claim the home office deduction. The home office deduction allows eligible taxpayers to reduce their tax obligation by writing off their workspace as a legitimate business expense. In most cases, the home office deduction applies only to self-employed and independent contractors, not those under traditional contracts who are classified as remote employees.
It all depends on how your employment is categorized by the IRS and if your office is solely used for business. Read on to learn more about how the home office deduction works in 2025.
Do I qualify for the home office deduction?
Though telework has become widespread for traditional W-2 employees, the home office deduction specifically applies to fully self-employed people or independent contractors who use a designated area for business on a regular and/or exclusive basis. That means you probably qualify if you work for yourself or own a small business and have allocated a part of your home as your primary workspace.
Is a full-time W2 employee working from home eligible?
If you're a W-2 remote employee hired for a period of time to complete ongoing work on a company's payroll, you probably can't claim the home office deduction.* So even if your boss gave you the green light to handle Zoom meetings in your guest room or kitchen, the only real benefit you get is that you can work in your pajamas.
However, there are some caveats. For example, if you use your home office as a dedicated space to conduct business for an independent side hustle -- that is, during hours outside of your regular job -- you might be able to take advantage of the deduction, according to Lisa Greene-Lewis, CPA and expert at TurboTax.
In that case, you could claim a portion of expenses like home mortgage interest, property taxes, rent and utilities based on the percentage of the home used for your side hustle, Greene-Lewis said.
Working out the exact expenses for a dedicated side business isn't easy to estimate. If you're trying to balance your W-2 income on top of self-employment, it's smart to consult a tax professional.
*Note that this applies to work-from-home employees under the Tax Cuts and Jobs Act of 2017, which is in place through 2025. Keep an eye on potential changes in the future.
What spaces are eligible for the home office deduction?
To claim the deduction, your home office must be reserved for work you do to earn a living, not just for occasional or incidental work.
"The space has to be a dedicated space where you conduct business," Greene-Lewis said. "It can't be the same area where you and your family eat dinner and your kids do homework."
According to the IRS, you do not meet the requirements if the area is used for both business and personal purposes. To qualify, your home office must be used "exclusively and regularly as your principal place of business" or somewhere "you meet or deal with patients, clients or customers in the normal course of your trade or business."
This applies regardless of whether you live in a house, apartment or condo, or whether you rent or own. And the space doesn't have to be inside your home, either. For example, if you're a musician who set up a studio in the garage, you might be able to take advantage of the home office deduction.
There are some exceptions to the "exclusive use" guideline, including storing inventory or using your home as a daycare facility. If you're wondering whether your workspace meets the criteria, the IRS has a helpful page with examples of arrangements that qualify.
How can I claim the home office deduction?
The IRS might want to verify that you're actually eligible for the home office deduction. Plan to keep copies of all your expense receipts (like buying a new desk and chair, for example) and any records demonstrating the office space is used exclusively for business use.
"It is important for taxpayers to maintain good records and ensure they can back up that they followed the eligibility rules if the IRS has follow-up questions in a correspondence or if the taxpayer ends up in an audit," said Garrett Watson, director of policy analysis at Tax Foundation.
To show your home office is the real deal, you can either use the IRS's "simplified method" or the regular method for your calculation. The simplified method is based on a set amount, allowing you to claim $5 per square foot up to a total of 300 square feet, without having to deduct specific expenses for the business use of your home.
You may want to consider the regular method of calculating expenses, which is much trickier but can pay off with a bigger deduction. For example, if you're running a licensed daycare center from your home, you would need to determine how much of the space is used for the business and what percentage of time it's occupied for the business.
What IRS benefits can I claim as a remote worker?
If you're working remotely as a W-2 employee, there aren't too many options to itemize deductions for work expenses.
If you're self-employed and working from home, however, your list of potential deductions is quite long. Anything you're spending money on to fuel your business (a new computer, new software to manage your invoices, ink cartridges for your printer and more) could be a business expense that will reduce your tax bill.
Will I get reimbursed for business expenses from my employer?
Getting reimbursed for business expenses depends on who you work for, where you live and the arrangement you have with your employer. If your company has implemented a return-to-office mandate that requires you to be in the office several days a week, don't expect reimbursement.
However, some locations must legally help employees who are covering business costs at home. According to PayCor, 11 states (along with Washington, DC, and Seattle) have laws that require reimbursement of a portion of certain expenses, such as internet and cell phone service.
Regardless of the tax category you fall into, there's one date you need to circle on your calendar: Tuesday, April 15, the 2025 tax deadline.
If you're worried about having your forms completely squared away by then, you can request a six-month extension. Just make sure you pay your estimated tax bill before then. Otherwise, you'll wind up paying a late penalty.
Taxes aren't easy to navigate. The more complicated your personal situation is, the more likely you are to benefit from finding expert assistance. From hiring a dedicated tax professional for your return to leveraging help from software like TurboTax and other well-known tax preparation services, you can benefit from understanding the nuances of deductions.
