Who can take the home office deduction?
Self-employed people and business owners can deduct a home office if the space is used regularly and only for business, and it's your main place of business (or where you meet clients). W-2 employees can't deduct a home office or unreimbursed job expenses on their federal return.
Two ways to figure it
- Simplified method: $5 per square foot, up to 300 square feet ($1,500 maximum). No depreciation and simple records.
- Regular method: the office's share of your actual home costs, such as rent or mortgage interest, utilities, insurance, repairs and depreciation. Often bigger, but needs more records.
Business mileage for 2026
The IRS standard mileage rate for business is 72.5 cents per mile for January through June 2026 and 76 cents per mile from July 1, after a mid-year increase for fuel costs. Commuting from home to a regular workplace doesn't count, but driving to clients, job sites and the bank does. Keep a log with dates, miles and purpose. You can use actual vehicle expenses instead, but you need to track every cost.
Frequently asked questions
What is the IRS mileage rate for 2026?
72.5 cents per mile for business driving from January through June, and 76 cents per mile from July 1 through December 31, after the IRS raised it mid-year. The rate covers gas, wear and tear, insurance and depreciation, so you don't deduct those separately.
Does the home office deduction increase audit risk?
Not if you qualify and keep good records: photos of the space, square footage and receipts for home expenses. Problems usually come from spaces that are also used personally.
Can I deduct a home office if I rent?
Yes. Under the regular method, renters deduct the office's share of rent, utilities and renter's insurance. The simplified method works the same for renters and owners.