Claiming home office deduction

Who Qualifies?

Here's the most important thing to know upfront: the home office deduction is only available to self-employed individuals. If you're a W-2 employee working from home, unfortunately you cannot claim this deduction (even if your employer requires it).

You qualify if:

• You are self-employed, a freelancer, or an independent contractor
• You use a specific area of your home **regularly and exclusively** for business
• It's your **principal place of business** (or you meet clients there regularly)

The Regular and Exclusive Use Test

The IRS requires that your home office space be used:

• **Regularly** — Not just occasionally, but on a consistent basis
• **Exclusively** — The space must be used only for business, not as a guest room that doubles as an office

A dedicated room works best, but a clearly defined area of a room can also qualify.

Two Methods to Calculate

Simplified Method

This is the easy route:

• Deduct **$5 per square foot** of your home office
• Maximum of **300 square feet** (so up to **$1,500**)
• No need to track actual home expenses

Actual Expense Method

This takes more work but can yield a larger deduction:

• Calculate the **percentage** of your home used for business (office square footage ÷ total home square footage)
• Apply that percentage to your actual home expenses: mortgage interest or rent, utilities, insurance, repairs, depreciation
• Track and document all expenses

How to Calculate in FileJoy

1. Click **Deductions** in the left sidebar
2. Select **Home office**
3. Choose your calculation method (**Simplified** or **Actual**)
4. Enter your office square footage and total home square footage
5. If using the actual method, enter your home expenses
6. FileJoy calculates the deduction automatically and shows you both methods so you can pick the better one

Tips

• Take a photo of your home office for your records
• If you use the actual method, keep receipts for all home expenses
• The simplified method is great if your office is small or you don't want to track expenses
• You can switch methods from year to year
• This deduction reduces your self-employment income, which also reduces your self-employment tax