Under the US tax law, if you are an employee working from home, you generally cannot deduct home office expenses. However, if you are self-employed or an independent contractor, you may be able to deduct certain expenses related to your home office.
There are two methods for deducting home office expenses for self-employed individuals:
- Simplified Option: The simplified option allows you to deduct a standard amount of $5 per square foot of your home used for business, up to a maximum of 300 square feet. This method is simpler and requires less record-keeping.
- Regular Method: The regular method involves calculating the actual expenses of your home office space, including expenses such as mortgage interest, utilities, insurance, and depreciation, and then determining the percentage of your home that is used for business purposes.
To claim a deduction for home office expenses on your US income tax return, you’ll need to file IRS Form 8829 “Expenses for Business Use of Your Home” along with your tax return. It’s important to keep records of your expenses and use of your home office space in case you are audited by the IRS.