Are Remote Work Expenses Tax Deductible?

Remote work has changed the way we work, but what about how we file our taxes? You’re not alone if you’re wondering whether your home office expenses are tax-deductible.  

The Tax Cuts and Jobs Act (TCJA) of 2017 changed the rules, limiting deductions for W-2 employees while keeping tax breaks for self-employed workers. That means not everyone can write off their internet bill or home office setup.  

Knowing what qualifies for deductions and how to claim eligible expenses can help you avoid common pitfalls and make the most of your tax situation. We’ll break down what home office expenses remote workers can deduct, how to track and document your expenses, and what remote workers need to know before filing tax returns.

Understanding remote work tax deductions

Working from home often comes with extra costs, like internet, office supplies, and dedicated workspaces. What, exactly, can you write off on your taxes? As we mentioned earlier, it depends on your employment status. 

• Are you self-employed? You may deduct qualifying home office expenses.
• Are you a W-2 employee? You’re likely ineligible for the home office deduction due to the TCJA—but that could change. The law is set to expire after 2025, meaning the deduction might return unless Congress extends the current rules. 

State tax laws can also come into play. Some states allow deductions for remote workers even if federal tax law doesn’t. To ensure compliance and maximize deductions, check your state’s rules or talk to a tax expert. 

Now, let’s break down what self-employed and W-2 workers need to know about remote work tax deductions.

Self-employed individuals

If you’re self-employed—which includes freelancing and some independent contracting—you may qualify for home office deductions that W-2 employees don’t. To write off home office expenses, you must use your workspace exclusively and regularly for business.  

For example, that means a dedicated home office counts, but a desk in your living room that doubles as a dinner table doesn’t. 

Specific expenses you can deduct include: 

• A portion of rent or mortgage based on the size of the office (using either the simplified or actual expense method; more on this later). 
• Utilities, internet, and office supplies directly related to your business. 
• Business-related equipment, such as computers, printers, and furniture. 

Additionally, self-employed individuals can deduct up to $1.22M in qualified business equipment under the Section 179 deduction for the 2024 tax year (the taxes due in 2025). The Section 179 deduction for 2025 (the taxes due in 2026) is 1,250,000. Keep receipts, invoices, and records of your home office expenses. The IRS requires proper documentation, and good recordkeeping helps you get the deductions you’re entitled to.

W-2 employees

If you’re a W-2 employee, you can’t deduct home office expenses on your federal tax return—even if you work remotely. This is due to the TCJA, which remains in effect through 2025. That means remote W-2 workers can’t write off expenses like internet, office furniture, rent, or travel, even if required for their jobs. 

There may be other ways to get money back on business expenses, though. For example, some employers offer accountable plans, which allow them to reimburse employees for certain work-related expenses tax-free. As long as the plan follows IRS regulations, employees can be reimbursed for necessary business expenses. Allowances or reimbursements paid to employees for job-related expenses are excluded from wages and are not subject to withholding.

If your employer doesn’t offer an accountable plan, you are responsible for covering remote work expenses without any tax relief.

What is the home office deduction and who qualifies for it?

Self-employed individuals, freelancers, and independent contractors may be eligible for the home office deduction—as long as they meet IRS requirements.  

To qualify, your home office must: 

• Be used exclusively for business: You must use the space only for your business activities and not for personal purposes. 
• Be used regularly: You must frequently use the area for work (not just occasionally). 
• Be your principal place of business: Your home office must be your primary place for conducting business or meeting clients and customers. 

Since W-2 employees aren’t eligible for this deduction—unless they run a separate business from home or their state allows it—it’s important to know what expenses qualify and how to calculate your deduction. 

Monika Krulic, EA, adds: “Remember, if you’re in a state that still allows miscellaneous itemized deductions including home office expenses—such as California or New York—you can still enter them on your Federal return and TurboTax will flow the information through to your state return.”

How to calculate the home office deduction?

There are two primary methods for calculating your home office deduction: 

• Using the simplified method, you deduct $5 per square foot of your home office up to 300 square feet ($1,500 max). This method requires minimal recordkeeping. 

• The actual expenses method involves calculating the actual expenses for your home office based on the office’s size relative to your home. This can include mortgage interest or rent, utilities, internet, insurance, and depreciation of the home. This method can result in larger deductions but requires detailed recordkeeping. 

To claim these deductions, self-employed individuals must report them on Schedule C and, if using the actual expenses method, file IRS Form 8829 (Expenses for Business Use of Your Home). 

The best method depends on the size of your home office and your willingness to track expenses. It’s worthwhile to calculate both methods to determine which will offer you the greater deduction.

Deductible home office expenses

If you qualify for the home office deduction, you can deduct some costs related to maintaining your workspace—many of which we’ve already touched on. These expenses fall into two main categories:

• Direct expenses: Costs specific to your home office, such as office furniture, repairs, or improvements made exclusively to the workspace. These expenses are fully deductible. 
• Indirect expenses: Costs that apply to your entire home but can be partially allocated to your home office. These include rent, mortgage interest, utilities, and maintenance costs, which are deductible based on the percentage of your home used for business.

Common deductible home office expenses:

• Mortgage interest or rent: A percentage of your mortgage interest or rent is deductible based on the portion of your home used for business. For example, if your home office takes up 10% of your home, you can deduct 10% of these costs. 
• Utilities: Expenses such as electricity, heating, water, and internet can be partially deducted based on home office usage. 
• Homeowners or renters insurance: A percentage of your insurance premiums is deductible. 
• Depreciation: If you own your home, you may be able to deduct a percentage of depreciation based on business use. Keep in mind that any depreciation you deduct on your home will need to be recaptured when you sell the home.
• Home repairs and maintenance: Repairs specific to your home office (e.g., fixing office wiring) are fully deductible, while general home repairs (e.g., HVAC servicing) are only partially deductible based on the percentage of your home that includes the home office.

The IRS requires detailed records of these expenses, so track receipts, bills, and calculations to stay compliant and maximize your deduction.

Make the most of your remote work tax benefits

If you’re self-employed, a freelancer, or an independent contractor and meet specific IRS criteria, you may qualify for remote work tax deductions—but only if your home office meets IRS requirements for exclusive and regular business use. W-2 employees, however, generally can’t deduct home office expenses unless reimbursed through an employer’s accountable plan or they live in a state that allows these deductions on the state return. 

To maximize your deductions, keep detailed records of business expenses like rent, utilities, and office supplies. Need help? With TurboTax, remote work tax deductions are easy. Our user-friendly software makes filing stress-free, guiding you through every deduction you qualify for—so you can keep more of your hard-earned money.