What Does the IRS Consider a Home Office? Key Rules

The IRS generally considers a home office a space in your home that you use regularly and exclusively for business, such as a room or a clearly identifiable section of a room. Your home can be a house, apartment, condominium, mobile home, boat, or similar property, but a hotel or other temporary lodging generally does not count as your home for this purpose.

For the home office deduction, the space must also meet a qualifying business-use test, such as being your principal place of business or a place where you regularly meet clients in the normal course of business. Simply placing a desk in a room does not make the entire room deductible if you also use that area for personal activities.

Regular use means you use the space for business on an ongoing basis rather than only occasionally or incidentally. Exclusive use generally means the area is used only for business, so a desk where you work during the day and your family does homework at night would not normally qualify.

The IRS recognizes limited exceptions to the exclusive-use rule for certain daycare facilities and for space used regularly to store inventory or product samples. Those exceptions have additional requirements, so the nature of your business and how you use the space matter.

Your home office can qualify as your principal place of business even if you work elsewhere, provided you use it regularly and exclusively for administrative or management activities and have no other fixed location where you conduct substantial administrative or management activities. For example, a self-employed professional who visits customers but handles scheduling and billing from a qualifying home office may meet this test.

A separate, freestanding structure, such as a studio or workshop, may also qualify if you use it regularly and exclusively for your business, even if it is not your principal place of business. Keep records of the space and its business use to support your deduction.

Start by identifying an area you can reserve for business, then measure it and keep track of relevant home expenses if you plan to calculate an actual-expense deduction. Our home office setup guide offers ideas for planning a workspace that fits your available space.

For additional planning, our team offers Your Ultimate Home Office Guide , a digital download with a printable eBook and workspace setup planner. Organizing your workspace and qualifying for a tax deduction are separate matters, so consider consulting a tax professional about your situation.