Home office used for the business

ExploreIRC §280A(c)For business owners

Explore: well supported, often missed.

If part of your home is used regularly and only for your business, a share of what you spend on the home can become a business expense: rent or mortgage interest, utilities, insurance and repairs.

How you claim it depends on how your business is set up. A sole proprietor deducts it on their own return. An S corp owner is an employee of the company, and employees can't deduct it themselves, so the company reimburses the home office costs under a written plan instead.

How it works

A part of your home used regularly and only for your business can carry a share of rent or mortgage interest, utilities, insurance and repairs. An S corp owner gets the company to reimburse the share under a written plan instead.

What makes it hold up

A floor plan with the office’s square footage
The home’s costs for the year
For an S corp, a written reimbursement plan (an “accountable plan”) and the reimbursements paid

Risks

Low when the space really is used only for business. Employees can’t take this. Depreciation on the office can be taxed when the home is sold.

Questions to ask your CPA

Do I qualify with the space I use?
Simplified method or actual costs?
Should my S corp set up an accountable plan?

Common questions

Does my space qualify?

It has to be used regularly and only for the business, and be your principal place of business. Doing the business's administration and management there usually counts, even if the real work happens elsewhere. A corner of the guest room also used by guests does not.

What is the simplified method?

Instead of tracking actual costs, you can deduct $5 for each square foot of office, up to 300 square feet. It's simpler, but often worth less than actual costs.

I own an S corp. How do I get the deduction?

Set up a written reimbursement plan, called an accountable plan, and have the company reimburse your office's share of home costs. The company deducts it and the reimbursement isn't income to you.

Is there a catch when I sell the house?

If you claimed depreciation on the office, that part can be taxed when you sell. Your CPA can weigh it against the yearly savings.

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Education, not advice. Tax law changes and every situation is different, so confirm the details with your CPA or tax advisor before acting. This page was last checked against tax law as of October 2026, including the 2025 tax law, in October 2026.