Can you get a tax deduction when using a home office?

Photo by Ken Tomita from Pexels
Millions of us now work from home, whether for part of the week or as a permanent remote team member.
In order to be as productive and comfortable as possible in a remote work scenario, having a home office space at your disposal is sensible, and yet there are costs that come with establishing and maintaining this setup.
So the question is whether you can benefit from tax breaks and deductions as a result of your home office use, and how you can harness any advantages that are on offer.
Who is able to claim home office deductions?
Tax breaks in this context are primarily available to freelancers and 1099 contractors. So if you’re self-employed and you offer up your services to different business clients, you could be in line for this benefit.
Unfortunately any W-2 employees, which is essentially everyone who has a full time role within a distinct business entity, are not eligible for these deductions since a ruling back in 2018.
How often do you need to use your home office to be eligible?
Another requirement of eligibility relates to how often you use your home as a working space, because of course the IRS won’t let you claim any expenses if this doesn’t happen very often.
When operating business from home, 1099 contractor workers and other self-employed people need to use their home office at least once a week or more. Any less than this, and it is not officially classed as regular use, thus making you ineligible for tax breaks.
Of course if your use of your home office is frequent, but sporadic, with some months spent working remotely interspersed with periods of visiting clients in person or getting down to business at another location, you simply have to reflect this in your tax filings. Honesty is the best policy, and you can claim for individual months spent working at home, even if this is not consistent across the quarter or the year.
Do you need a separate room set up as a home office to reduce your tax bill?
Not everyone has enough spare rooms at home to set aside one for the purposes of work, and this is something that the tax authorities recognize. All you need is a desk and an office chair, and you’re good to go.
The point is that deductions for home office users are based on the objects that are used exclusively for business purposes. You can’t claim a tax break for a new couch just because it occupies the same room as your work-from-home setup, for example.
Can you claim for a home office and a separate working space?
Plenty of freelancers not only work from home, but also make use of dedicated office space or even coworking setups in shared facilities. This is all fine and dandy, but from a tax break perspective it brings up one major caveat.
Simply put, you can only claim expenses against one of these elements of your working configuration, not both. So you’ll need to choose between any home office expenses and other costs that come from third party office spaces.
What expenses are deductible?
We mentioned that furniture costs can be deductible, so long as they are business-related. The same goes for other expenses, whether that might be rent, insurance, utility bills, property maintenance and even cleaning services.
All that matters is that you only deduct what applies to the business area of your home, which means working out usage and calculating floor area of your home office as well.
Get the advice and guidance of an accountant to ensure that you are filing accurate figures when using home office deductibles to your advantage.