Homeowners

Home Office Tax Write-Offs: What Self-Employed and Gig Workers Need to Know

If you're self-employed or part of the gig economy—and you've carved out a corner of your home to run your business—you might be leaving money on the table come tax time.

The home office deduction could help renters and homeowners lower their tax bills. But figuring out if you’re eligible for the tax breaks can be confusing.

The good news? You don't need to be a tax expert to understand how it works. Whether you have your own business or freelance, drive an Uber, sell handmade goods, or run your own limited liability company (LLC) as a side hustle, you may be able to save money on your taxes.

"Self-employed individuals can claim a home office deduction if a part of their home is used for work," said Wendy Christiansen, a certified public accountant at Taxes for Expats, based in New York City.

However, remote and hybrid workers who are employed by a company or organization and receive a W-2, generally aren’t eligible to claim the home office deduction. 

What qualifies as self-employment

You're likely considered self-employed if you run your own business, even part-time, according to the Internal Revenue Service (IRS). That includes contractors, consultants, creators, and gig workers.

As long as you're in business for yourself, you may qualify for tax benefits that traditional employees don't.

That said, not everyone who works from home qualifies for the break. If you're a remote employee who receives a W-2, you're not eligible—unless you also have a side gig or freelance work that makes you self-employed.

"It comes down to tax status: whether you’re self-employed or an employee in the eyes of the IRS," said Christiansen. "Even if your couch is your command center, the IRS doesn’t count it—no matter how independent your day-to-day feels. That said, your employer can reimburse you for home office costs tax-free if they use an 'accountable plan'."

What is the home office deduction?

The home office deduction allows eligible self-employed individuals to deduct certain costs related to the part of their home used exclusively and regularly for business.

That means a dedicated space—not just a laptop on the dining table.

It must also be your principal place of business, even if you occasionally work elsewhere.

How to calculate your home office deduction

Since 2013, the IRS has offered a simplified way to claim this deduction.

With the simplified method, you multiply $5 by the square footage of your office, up to 300 square feet. That's a maximum deduction of $1,500—no receipts required.

The regular method requires more detailed recordkeeping. You'll calculate the percentage of your home used for business and apply it to actual expenses like mortgage interest, utilities, repairs, and depreciation.

If your expenses are high and well-documented, the regular method might save you more.

But for many freelancers and gig workers, simplicity wins.

What counts as a home office

If you've taken a Zoom call from your spare bedroom while your dog barked in the background, you've probably wondered—can I write this off?

Maybe. But only if that room is used exclusively and regularly for business.

You don't have to own your home to qualify. Renters can take the deduction, too.

The IRS also allows deductions for separate structures like a garage, studio, or shed—if they're used solely for business purposes.

Just remember: the space must be used consistently and only for work. If it doubles as a guest room or storage closet, it doesn't qualify.

Can you write off your mortgage?

Generally, you’re not allowed to write off your mortgage if you work out of your home.

"Buying a home is generally a personal expense," said Christiansen. “But if the property is used strictly for business, you may be able to deduct certain costs.”

If your business owns the property and it's used 100% for commercial purposes—like a warehouse or a studio—you can deduct things like mortgage interest, property taxes, and maintenance.

But trying to write off your personal residence as a business? That's a red flag.

"A big mistake is renting part of your home to your business at an unrealistic rate or without a formal lease," said Christiansen. "That's something the IRS will notice."

Rules for LLCs and corporations

An LLC (limited liability company) is a flexible legal structure that can be taxed in different ways depending on how you set it up. Many solo business owners operate their LLCs as sole proprietorships by default. But if you’ve elected S Corp status for your LLC to save on self-employment taxes, or formed a partnership with another owner, you’re playing by different rules.

For example, a freelance writer working solo may remain a sole proprietor, while two friends running a photography business together might form an LLC taxed as a partnership. A consultant who scales up and hires a team might choose S Corp status to reduce tax liability.

If your LLC is taxed as a sole proprietorship (a single-member LLC), you can typically take the home office deduction on your personal tax return using Schedule C.

If your LLC is taxed as an S corporation or partnership, you generally can’t take the home office deduction directly on your personal return. Instead, the business can reimburse you for home office expenses through an accountable plan.

Handled correctly, these reimbursements are tax-free and don’t count as income. But the IRS expects a clear system—think receipts, records, and timely reporting. Without that, you could lose the benefit.

Gig workers, this applies to you too

If you’re a gig worker, such as someone who drives for a rideshare app, sells handcrafted jewelry, writes articles for websites, and many other kinds of work, your home may qualify for a tax break if it meets the same requirements of exclusive and regular use.

Even if your work is part-time or your income comes in small bursts, you still need to report it. This may help you to qualify for deductions that can ease your tax burden.

"The home office deduction can be a great benefit," said Christiansen. "But like any tax break, it needs to be handled correctly. The IRS is looking for consistency, reasonable claims, and clear records."