The number of people with hybrid schedules has nearly tripled over the last few years. Does working from home come with tax perks? Well, yes and no. Here’s what you should know about the home office tax deduction before you file your tax return this year.

What is the home office tax deduction?

The home office tax deduction allows you to deduct expenses for the part of your home used exclusively for business.

What qualifies for the home office tax deduction?

To qualify, your home office must be your primary place of business and used regularly and exclusively for work. This generally applies to self-employed individuals.

What if you work remotely and in the office?

If you have a hybrid schedule, you might be wondering if you can deduct your home office expenses since you do spend time working at home. Unfortunately if you’re a W-2 employee working from home, you cannot claim the deduction, even if you have unreimbursed expenses. The ability to deduct home office expenses for employees was suspended and is not expected to return until 2026, unless TCJA gets extended.

How do you calculate the home office tax deduction?

You can calculate it using either:

1. Simplified Method – Deduct $5 per square foot of your office space (up to 300 sq. ft.).
2. Regular Method – Deduct a portion of actual home expenses (including insurance, technology, rent, mortgage interest, utilities, and repairs)) based on the percentage of your home used for business.

Key things to consider

• The exclusive use rule does not apply if you use a part of your home for inventory storage or operate a daycare facility
• Spaces used as hotels or inns do not qualify for the deduction