Tax Strategies for Homeowners

To make the most of your opportunities, contact us with any questions regarding deductions for your home.

Home Offices

If you operate a business out of your home, you may qualify for a home office deduction. However, because of the Tax Cuts and Jobs Act of 2017, even fewer taxpayers than in years past will be eligible for this deduction. Home office expenses for employees of companies are considered a miscellaneous itemized deduction. Under the law from 2018-2025, company employees who work from home will not be able to deduct any home office expenses. If you are self-employed, however, you can deduct eligible home office expenses against your self-employment income.

There are eligibility requirements for the deduction. If you are self-employed, generally your home office must be your principal place of business, though there are exceptions. Any personal use of the area makes you ineligible for the deduction. The space must be used regularly and exclusively for business purposes.

If you meet these requirements, you have two options for the deduction: You may deduct a portion of your homeowners insurance, home repairs, mortgage interest, property taxes, utilities and certain other expenses equal to the percentage of the space the office occupies. Or, you can take the “safe harbor” deduction with one calculation: $5 x the number of square feet of the office space. This is capped at $1,500 per year, based on a maximum of 300 square feet.