Home office for self-employed taxpayers: what to document
Updated: 2026
Working from home does not automatically create a deduction. A self-employed taxpayer must determine whether the space meets business-use-of-home rules and which calculation method is appropriate.
Exclusive and regular use
In general, the space must be used regularly for business and, for many situations, exclusively for that purpose. A desk that is also routinely used for personal activities may not satisfy the standard exclusive-use test.
Separate rules and exceptions can apply, including certain storage and daycare uses. Describe how the space is actually used rather than simply stating that work was performed at home.
Simplified method
For qualified business use of a home, a taxpayer can choose the simplified method. The IRS uses a rate of $5 per square foot of qualified space, up to 300 square feet.
The simplified method reduces calculation and recordkeeping work, but it does not change the underlying eligibility requirements. The method is selected for a particular tax year.
Regular method and Form 8829
Under the regular method, actual expenses and the business percentage of the home are considered. For Schedule C, Form 8829 may be used to calculate the deduction.
Rent, mortgage interest, real estate taxes, utilities, insurance, repairs, and depreciation can matter. Not every cost is treated the same way, so source records are more useful than a rough total.
What to prepare
Measure the total home area and the business space. Prepare the date business use began, a description of how the space is used, and annual expenses if the regular method is being considered. Keep bills, statements, and records for improvements or repairs that may relate to the workspace.
What to prepare
A list of documents and supporting records for credits, dependents, mileage, expenses, and foreign items.