What Can You Write Off on Taxes If You Work From Home?

If you work from home and you’re self-employed, you can write off a portion of your rent or mortgage interest, utilities, internet, insurance, and other household costs tied to a dedicated workspace, plus the full cost of business equipment, supplies, and mileage to work-related destinations. If you’re a W-2 employee, the answer is much shorter: nothing on your federal return. That split is the first thing to sort out, because everything else depends on it.

Employees vs. Self-Employed: Who Can Actually Deduct

The Tax Cuts and Jobs Act suspended unreimbursed employee expenses starting in 2018, and the One Big Beautiful Bill Act removed the expiration date, making the prohibition permanent.¹ It doesn’t matter how many hours you log at your kitchen table. If your income comes on a W-2, your home office costs are not deductible federally.

One workaround exists: an employer accountable plan. Your employer reimburses you for legitimate home office expenses, the reimbursement stays off your W-2, and it’s tax-free. The arrangement has to require a business connection for each expense, timely documentation, and return of any excess.² If your employer doesn’t offer one, your only remaining shot is a state-level deduction, discussed at the end.

Self-employed workers are in a different position entirely. Sole proprietors, independent contractors, freelancers, and gig workers who file Schedule C can deduct home office expenses against business income.³ Because the deduction reduces net business profit, it lowers both income tax and self-employment tax. That’s a double benefit, and it’s why the write-offs below are worth taking the time to calculate correctly.

The Full List of What Self-Employed Workers Can Write Off

A Share of Your Home Operating Costs

Once you qualify (rules below), a percentage of the following becomes deductible: rent or mortgage interest, property taxes, homeowner’s or renter’s insurance, utilities, and general repairs that affect the whole home.⁴ These are indirect expenses. Direct expenses, meaning costs tied only to the office space (repainting only that room, for example), are 100% deductible. Landscaping the front yard and other costs unrelated to the office area don’t count at all.

Internet, Phone, and Utilities

Internet is treated like a utility. If your business-use percentage is 15%, you deduct 15% of the monthly bill.⁴ Electricity, gas, water, and trash follow the same logic.

Phone has its own rule. The base charge for the first landline into your home is always personal and never deductible. Business long-distance calls on that line are deductible, and a second line used exclusively for business is fully deductible.⁴ For a cell phone, deduct the share of usage that’s business-related. Phone and internet expenses go straight on Schedule C, not on Form 8829, since they’re business costs in their own right.

Equipment and Supplies

Computers, monitors, printers, desks, chairs, networking gear, and specialized software are deductible when they’re ordinary and necessary for your work. These are standalone Schedule C expenses whether or not you claim a home office deduction. If an item does double duty, deduct only the business-use share.

Two provisions let you write off the full cost the year you buy the equipment rather than spreading it over years:

Section 179 expensing lets you deduct up to roughly $2.56 million of qualifying property placed in service during 2026, with a phase-out beginning above approximately $4.09 million. For a home-based business, these caps are essentially unreachable, so the practical effect is immediate expensing of any equipment you buy.
The One Big Beautiful Bill Act restored permanent 100% bonus depreciation for eligible property acquired after January 19, 2025, allowing you to write off the entire cost of qualifying assets the year they go into service.⁵

Day-to-day supplies (paper, ink, pens, postage, shipping materials) are deducted as expenses in the year you pay for them. No election, no special form.

Mileage Between Home and Work Sites

This is easy to miss. When your home qualifies as your principal place of business, driving from home to any other work location is deductible business travel, not personal commuting.⁶ Without a qualifying home office, the same trips would be commuting, which is never deductible.

The 2026 standard mileage rate for business use is 72.5 cents per mile.⁷ A home-based designer who drives to client meetings, print shops, and photo shoots can log every mile. Five thousand business miles at 72.5 cents comes to $3,625, which can easily exceed the home office deduction itself.

The Two Ways to Calculate the Home Portion

Simplified Method

Claim $5 per square foot of office space, up to 300 square feet, for a maximum deduction of $1,500.⁸ You enter the number on Schedule C and you’re done. No Form 8829, no allocating utility bills, no depreciation math.

The tradeoffs: the $1,500 ceiling applies no matter how high your actual costs are, and there’s no carryforward if your business income is too low to absorb the full deduction — you simply lose it.⁹ If you used the space for only part of the year, you average the allowable square footage across all 12 months, counting only months with 15 or more days of use.¹⁰ Start in August with a 300-square-foot office through December and you average 125 square feet, for a $625 deduction.

One upside worth knowing: with the simplified method, mortgage interest and property taxes don’t get split. You still deduct them in full on Schedule A if you itemize.

Regular Method

The regular method uses Form 8829.¹¹ Divide your office square footage by total home square footage. A 200-square-foot office in a 1,600-square-foot home gives you a 12.5% business-use rate. If all your rooms are roughly the same size, you can instead divide business rooms by total rooms.⁴

Apply that percentage to the indirect expenses listed earlier, add any direct expenses at 100%, and if you own your home, add depreciation on the business portion of the property. Under this method, the business share of mortgage interest and property taxes lands on Form 8829 rather than Schedule A.

Two things to watch. First, the deduction can’t exceed the gross income from the business it supports. If the business earned $8,000 and your calculated home expenses total $10,000, you deduct $8,000 this year and carry the $2,000 forward.⁹ That carryforward is a real advantage over the simplified method. Second, depreciation triggers a tax cost later.

The Catch: Depreciation Recapture When You Sell

If you use the regular method and claim depreciation, you need to plan for the sale. The Section 121 exclusion lets homeowners exclude up to $250,000 of gain ($500,000 for joint filers) on a primary residence. But gain attributable to depreciation you claimed (or were allowed to claim, even if you didn’t) after May 6, 1997, cannot be excluded.¹²

That depreciation-related gain is taxed at a maximum 25% rate as unrecaptured Section 1250 gain, and may also face the 3.8% net investment income tax.¹² Claim $15,000 in depreciation over the years, and you’ll owe tax on $15,000 when you sell, even if the rest of your gain is excluded. The simplified method has no depreciation and no recapture. If you own an appreciating home and plan to stay for a long time, run the numbers before locking in the regular method.

Qualifying Rules You Have to Meet

Two IRS tests decide whether your workspace qualifies at all.

Exclusive and Regular Use

A specific area of your home must be used only for business, and used consistently.⁴ The dining table your kids use after you shut the laptop doesn’t qualify. A spare bedroom converted into a full-time office does. You don’t need a room with a door, but the dedicated area can’t host anything personal.

Two exceptions relax the exclusive-use rule. Space used to store inventory or product samples qualifies even if it does double duty, provided your home is your only fixed business location. And a licensed daycare operated from your home qualifies without exclusive use.¹³

Principal Place of Business

Your home office must be either the primary location where you do your work, or somewhere you regularly meet clients in person. The most common way to satisfy this: the home office is where you handle the administrative side of the business (invoicing, scheduling, correspondence) and you have no other fixed location where that work happens.⁴ A photographer who shoots on location but runs the business from home clears this bar. A detached structure like a converted garage or backyard studio qualifies if used exclusively and regularly for business, even when it isn’t your principal workplace.

Records to Keep

A home office deduction that runs high relative to business income is the kind of thing that draws IRS attention.¹⁴ Documentation is your defense.

Save receipts, bank statements, and invoices for every expense you deduct: rent or mortgage payments, utility bills, insurance premiums, repairs, equipment.¹⁵ Keep a mileage log with date, destination, business purpose, and miles for each trip. Photograph or sketch your office layout with measurements so you can defend the square footage if asked.

Hold tax records at least three years from the filing date, the standard assessment window. If you claim depreciation, keep property records until you sell and the limitations period for that year runs out.¹⁵ Losing depreciation records years later is expensive: the IRS reduces your home’s basis by the depreciation you were allowed to claim whether or not you can prove you actually took it.

State Deductions if You’re a W-2 Employee

The federal door is closed for employees, but a handful of states did not adopt the federal suspension of miscellaneous itemized deductions. Their rules generally track what federal law looked like before 2018, and they may require a state form similar to the old Form 2106 or impose their own AGI floors. Eligibility and calculation methods vary by state.

If you’re a W-2 remote worker, check your state’s tax agency site or ask a tax professional whether a state deduction is available. The federal prohibition doesn’t automatically mean zero write-off — it just means anything you get will come off your state return, not your federal one.

1
Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions
2
Internal Revenue Service. Publication 463, Travel, Gift, and Car Expenses
3
Internal Revenue Service. About Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship)
4
Internal Revenue Service. Publication 587, Business Use of Your Home
5
Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One Big Beautiful Bill
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Internal Revenue Service. Revenue Ruling 99-7 – Traveling Expenses
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Internal Revenue Service. 2026 Standard Mileage Rates (Notice 2026-10)
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Internal Revenue Service. Simplified Option for Home Office Deduction
9
Internal Revenue Service. Topic No. 509, Business Use of Home
10
Internal Revenue Service. FAQs – Simplified Method for Home Office Deduction
11
Internal Revenue Service. Instructions for Form 8829
12
Internal Revenue Service. Property (Basis, Sale of Home, Etc.) 5
13
Office of the Law Revision Counsel. 26 USC 280A – Disallowance of Certain Expenses in Connection With Business Use of Home
14
Internal Revenue Service. IRS Audits
15
Internal Revenue Service. Topic No. 305, Recordkeeping