Home Office Tax Deductions: Tax Code Changes Impact Size and Location Of Home Office

Several years ago I was working with a client who had a new large family room next to the kitchen –  where their family and social life now centered. That left them with an unused living room and a too-small home office. We moved her home office into the living room. It was spacious with great sun and views of her garden.  She could really work in her new space and she loved it. The former small home office was set up for computer homework for their children. Everyone was happy.

While I was thinking of comfort, energy and functionality when moving her home office into a larger space, she gained a larger home office tax deduction.

The IRS states that if you are self-employed, in order claim a home office tax deduction, “it must be used regularly and exclusively“  as a home office. That means a desk in a corner of the family room, where everyone watches TV doesn’t qualify. Working on the dining room table will not count, but if you convert your dining room into a home office it will.

*I am not sure how the IRS rules if you use your converted home office as a dining room for entertaining twice a year or have guests in your home office/guest room two weeks out of the year. Check with your tax professional.

Young woman in large room, measuring floor with tape measure.

A larger home office means a larger tax deduction.


American Express Open Forum reports for the tax year 2013 – when you file in 2014 – the IRS will be simplifying the home office deductions: you claim $5 per square foot up to $1500, or 300 square feet.

Think twice about making do with the smallest space in your home. If you have the option of setting up your home office in a larger space – do it!

Click here to find a space for a home office in your home.

Click here to learn how to create boundaries between work and home life in your home office.

Thanks to Lynn Terry of ClickNewz  for the idea.

Learn more about  claiming under-used and over-looked spaces for your home office in The Smarter Home Office: 8 Simple Steps to Increase Your Income, Inspiration and Comfort.

photo by victor1558