Have a Home Office? What You Need to Know Before Filing Taxes in 2025

Last updated March 21, 2025

Running your small business from home has the potential not only to improve your bottom line and give you more flexibility, but to pay off in real dividends around tax season. These are the home office deductions you can claim—and can’t claim—for 2025 (for the 2024 tax year).

Make Sure You Qualify for Home Office Tax Deductions

First things first: make sure you qualify for tax breaks for your home office. According to the IRS, a true home office must be used solely for business purposes. That means any activity of a personal nature—surfing the web, paying bills, watching TV—cannot occur inside your home office.

Keep in mind that remote employees can no longer claim home office and non-reimbursable expenses from their employer. If you’re self-employed, however, you’re still eligible to deduct home office expenses.

How to Claim Home Office Deductions: Simplified and Regular Methods

There are two ways to claim your home office tax deductions. You aren’t locked in after you’ve chosen one, meaning you can choose one method for 2025 and switch the following year.

The Simplified Method is aptly named and often best suited to those with a small home office. HouseLogic explains that all you need is the square footage of your home office—up to 300 square feet—to arrive at your deduction in seconds. Here’s the formula:

Home office square footage x $5 = Deduction

For example, if your home office is 300 square feet, your total tax deduction is $1,500 (300 x $5).

By contrast, the Regular Method can result in a higher tax deduction but requires careful tracking of expenses. On the upside, as NerdWallet points out, you can deduct mortgage interest, maintenance, utilities, insurance, and other expenses. If your home office occupies a significant portion of your home, the traditional method may be a better bet. If you’d like to use this method in 2026, start logging those expenses now to save time next April.

Form 8829 can easily help you determine the allowable expenses for your home office that you can claim on Form 1040 (the form you’ll use to calculate your taxable income).

Tax Deductions Dos & Don’ts

If you’ve decided to go the traditional route, take a look around your home and office because there may be more tax savings than you realized. For a complete list of home office tax benefits, download the “Business Use of Your Home” document from the IRS. Here are a few of the more surprising expenses that do and don’t qualify.

Tax-Deductible Expenses

• Home office décor. You can claim your desk, chair, coffee table, and even the carefully chosen wall art. Be sure that whatever you do deduct lives in your home office exclusively to avoid an audit down the road. The same goes for any equipment you use in your home office although it may qualify for depreciation. Read the guidelines carefully.
• Snow removal. If you live in a wintry climate, not only can you deduct paying the kid down the street to shovel but you can also deduct the shovel. Check the rules around square footage of your home office to ensure you qualify for this break.
• General home expenses. Everything that goes into the upkeep of your home may also impact your home office. Tax-deductible expenses may include utilities, cleaning services, trash removal, water, gas, rent, homeowners insurance, and more. If your home depreciates, this can even be deducted as an indirect expense once you determine the percentage of your home used for business through a reasonable method (this same method must be used for all calculations).

Nondeductible Expenses

• Landscaping and lawn care. Unlike snow removal, taking care of your lawn is not tax-deductible. The only caveat is if your small business is in this sector. Investing in your curb appeal is still a good idea, however. It increases the value of your home and presents a desirable first impression when clients visit.
• Home office spillover. As mentioned above, the IRS has drawn a clear line between office use and personal enjoyment. For example, if the dining room table doubles as your meet-and-greet area for new clients, it doesn’t qualify.
• Home office renovations. Small home repairs may qualify but major renovations like new flooring typically don’t. If an upgrade can boost your business, explore how some homeowners fund those plans with a Hometap investment.

Building Your Business Year-Round

Home office tax deductions are one way to save on overall business expenses. Who doesn’t look forward to a refund check? Keep in mind, though, that tax rules are unpredictable and cash back is not a sure thing. The good news for small business owners is that there are a number of other ways to secure the funds needed to grow your business.

Taking out a loan may seem an obvious, if scary, choice. Weigh the pros and cons of a small business loan versus a home equity loan before you sign.

For many small business owners, taking on another loan and another monthly payment may be a nonstarter. With a Hometap Investment, you can tap into your equity without monthly payments, giving you near-immediate access to the funds you need now in exchange for a share in the future value of your home.

Helpful Resources

For more information on tax write offs for home offices, check out these articles:

• H&R Block self-employed filing
• IRS' self-employed tax centerTurboTax self-employed filing
• Hometap’s self-employed guide

The more you know about your home equity, the better decisions you can make about what to do with it. Do you know how much equity you have in your home? The Home Equity Dashboard makes it easy to find out.