Yes, if you are self-employed. IRS Publication 587 (2025), used for 2025 returns, says that if you rent the home you live in and meet the business use requirements, you can deduct the business part of your rent. The space must be used regularly and exclusively for business, with limited exceptions for daycare and inventory storage. You can also use the simplified method instead: $5 per square foot, up to 300 square feet. ProfitDrawer bookkeeping spreadsheets track your other business expenses alongside it.
Two ways to figure it (2025 tax year):
- Regular method: find your business percentage by comparing the size of the business area with the whole home. Any reasonable method is allowed. Schedule C filers figure it on Form 8829.
- Simplified method: $5 x the business square feet, with the area capped at 300 square feet, so the most is $1,500 a year. See answer 21 for how it works.
Example arithmetic (example numbers only): a 150 square foot office in a 1,200 square foot apartment is 150 / 1,200 = 12.5%. With $18,000 of rent for the year, the business part is 12.5% x $18,000 = $2,250. The simplified method for the same room gives 150 x $5 = $750.
Tests that still apply when you rent:
- Regular use: a specific area used for business on a regular basis, not now and then.
- Exclusive use: that area is used only for business, unless an exception such as daycare or inventory storage applies.
- Principal place of business: the area is your main place of business, a place where you meet clients or customers, or a separate structure used for the business.
The deduction is for self-employed people filing Schedule C, not for employees. Keep your lease, rent receipts and a simple floor sketch with measurements. General information, not tax advice.
Source: Publication 587 (2025), Business Use of Your Home (IRS) · Updated
Tools and spreadsheets for this
Related questions
All questions on ProfitDrawer Answers →
General information, not tax, legal or financial advice. Check the rules for your state and your situation.