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FAQ – What Home Office Expenses are Tax Deductible?

When it comes to home offices, it’s all about the tax deductions, baby! You could sit on your couch, watch tv, and do your small business bookkeeping and billing...but there’s no tax benefit to that. By creating and maintaining a home office for your small business, you can claim home office deductions that in turn reduce your taxable income at the end of the year. If you have already set up a qualifying home office, start tracking expenses and keeping meticulous records for your income taxes.

Here’s a lengthy, though not comprehensive, list of common home office deductions. Keep in mind these do not include typical business expenses that you would normally deduct whether or not you had a home office.

Tax Deductible Home Office Expenses

  • Paint
  • Carpet
  • Repairs or additions to the structure of the office
  • To learn about the unlikely deduction a bathroom as a portion of your home office, read this post.
  • Office decorations
  • Office furniture including desks, chairs, rugs, lamps, and that fancy painting you just had to have to hang above your desk
  • A separate business phone line (you cannot deduct a landline used for your home phone calls)
  • Other home-related expenses or repairs including snow plowing, roof repair, and trash removal. These types of expenses are deductible, according to the square-footage percentage of your home used as a business.
  • *You cannot deduct expenses for landscaping or lawn care unless you show off your lawn for your business, like if you own a landscaping company.

You can deduct a portion of these expenses, based on the square footage of your home office:

  • Depreciation
  • Rent or mortgage
  • Property Taxes
  • Home insurance
  • Utilities (electricity, heating, water, sewer)
  • Maintenance
  • General repairs

Home office deductions can be tricky. While claiming a home office is not a red flag for the IRS, you want to be careful and not get overzealous when it comes to deductions. The simplified method can make it easier for you to claim the deduction but might not provide you with biggest deduction.

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