Can I Deduct Home Office Expenses as a Freelancer?

To deduct home office expenses, the space must be used exclusively and regularly for business. 'Exclusively' is strict — if your kids do homework there or you watch Netflix on the same couch you use for client calls, the IRS doesn't allow the deduction. A dedicated room or a clearly defined workspace area qualifies.

Exclusive doesn't mean 'mostly business.' It means 'only business.' The IRS is strict about this part.

The simplified method: $5 per square foot of home office space, up to 300 sq ft (max $1,500). No record-keeping required beyond the square footage. The actual expense method: calculate your home office's percentage of total home space, then deduct that percentage of rent/mortgage, utilities, insurance, internet, and depreciation.

• A dedicated room used only for work (best case)
• A defined corner of a room with a desk and equipment used only for work
• Storage space used exclusively for business inventory or supplies

Renters apply the business percentage to monthly rent. Homeowners apply it to mortgage interest, property tax, insurance, and depreciation. Renters often get the bigger deduction because rent is fully ongoing, while a paid-off mortgage only generates depreciation.

• The kitchen table where you sometimes work
• Spaces shared with personal activity (TV room with your work laptop)
• Lawn care or front-yard improvements unrelated to client visits
• Repairs unrelated to the home office area

Method 1 (Simplified):
Office: 200 sq ft → 200 × $5 = $1,000

Method 2 (Actual):
Office: 200 sq ft / Home: 1,500 sq ft = 13.33%
Annual rent: $30,000 → 13.33% = $4,000
Annual utilities: $3,000 → 13.33% = $400
Internet: $1,200 → 13.33% = $160
Total deduction: ~$4,560