Somewhere along the way, “the home office deduction is an audit flag” became conventional wisdom. It’s mostly a myth — and it costs cautious business owners real money every year.
The deduction is legitimate, it’s common, and if you work from home it’s very likely yours. You just have to clear two simple tests and pick one of two methods.
Test one: exclusive use
The space has to be used only for business. A spare bedroom you’ve turned into an office qualifies. The kitchen table where you also eat dinner does not. This is the test people fail — not because they’re cheating, but because they assume “mostly for work” is good enough. It isn’t. Exclusive means exclusive.
Test two: regular use
You use that space for business on a regular basis — not once a quarter when you need quiet. For most self-employed people who work from home, this one’s automatic.
Then pick a method
- Simplified. $5 per square foot, up to 300 square feet — a maximum of $1,500. No receipts, no math. Great for small spaces and people who hate bookkeeping.
- Actual expenses. Figure the percentage of your home the office takes up, then deduct that share of rent or mortgage interest, utilities, insurance, and repairs. More paperwork, but for a real room in a real home it usually wins — often by a lot.
You can choose whichever gives the bigger number, and you can switch year to year.
The home office is one of a category of “worth-thousands” deductions that reward doing them properly. The free checklist has the home-office section laid out as a tick-the-box — the exclusive-use questions, both methods, and this year’s numbers — alongside 50+ other write-offs.
The 2026 Self-Employed Tax Deduction Checklist
50+ write-offs, organized by category, with this year’s exact numbers — the tick-the-box version of everything above. Run it against your bank statement tonight.
