Can I deduct my home office if I run an LLC from home?

Yes. If you use a space in your home regularly and exclusively for business, you can usually claim the home office deduction-even if your LLC doesn’t deduct it directly.

How do I calculate the home office deduction?

You can use the standard method based on actual expenses and square footage, or the simplified method, which allows $5 per square foot up to 300 square feet.

Can my LLC deduct home office expenses directly?

Usually no. For sole proprietors and partnerships, the deduction is claimed on the owner's personal return. S corps can reimburse the owner under an accountable plan.

What expenses qualify for the home office deduction?

Qualifying expenses may include mortgage interest, rent, utilities, insurance, repairs, and depreciation-based on the business-use portion of the home.

What are the IRS requirements for a home office deduction?

The space must be used regularly and exclusively for business, and it must be your principal place of business or a space where you meet clients or perform core tasks.

Can I Deduct My Home Office Through My LLC?

Yes, your LLC can deduct home office expenses if the space is used regularly and exclusively for business, and if the deduction is taken on your personal tax return-not directly through the LLC.

Many LLC owners operate out of a home office, especially when starting out. The IRS allows a home office deduction, but it’s important to follow the rules and understand how it applies depending on how your LLC is taxed. While the LLC may not claim the deduction on its own return, you as the owner can usually take the write-off as a pass-through benefit.

Contents

1. Who Can Claim the Home Office Deduction?
2. IRS Requirements for a Home Office Deduction
3. What Can Be Deducted?
- Standard Method
- Simplified Method
4. How to Report the Deduction
5. What If I Use the Home Office for Both Business and Personal Use?

1. Who Can Claim the Home Office Deduction?

If your LLC is a single-member LLC taxed as a sole proprietorship, or a multi-member LLC taxed as a partnership, you can usually claim the home office deduction on your personal income tax return. The LLC doesn’t deduct the expense directly, but it still qualifies as a business-related deduction for you as the owner.

If your LLC is taxed as an S corporation or C corporation, claiming the deduction becomes more complex. In those cases, the business can reimburse you for the use of your home office under an “accountable plan,” and the business deducts the reimbursement as a legitimate expense.

2. IRS Requirements for a Home Office Deduction

The IRS has two main requirements for home office deductions:

Regular and exclusive use: The space must be used only for business purposes. A spare bedroom that doubles as a guest room or personal space won’t qualify.
Principal place of business: Your home office must be your primary place of business or a place where you regularly meet clients or perform administrative tasks.

Occasional use or shared personal/business use doesn’t meet the IRS standard. You must be able to prove your home office is truly for business only.

3. What Can Be Deducted?

There are two ways to deduct home office expenses:

Standard Method

With the standard method, you calculate the percentage of your home used for business and apply that percentage to your eligible home expenses. These may include:

Mortgage interest or rent
Utilities (electricity, gas, water)
Property taxes
Homeowners insurance
Depreciation (for homeowners)
Repairs and maintenance (related to the office)

For example, if your home office is 200 square feet and your home is 2,000 square feet, that’s 10%. You could potentially deduct 10% of your eligible expenses.

Simplified Method

The IRS also offers a simplified option: deduct $5 per square foot of your home office, up to a maximum of 300 square feet. This gives you a flat deduction of up to $1,500 without having to track actual expenses.

4. How to Report the Deduction

How you report the deduction depends on your LLC’s tax structure:

Single-member LLC: File IRS Form 8829 with Schedule C of your personal return (Form 1040).
Multi-member LLC (partnership): Home office expenses are not deducted at the business level. Each partner may claim a deduction on their individual return based on unreimbursed business use of their home-though this has limits under current tax law.
S corporation or C corporation: The LLC must reimburse the employee-owner under an accountable plan. The company deducts the reimbursement, and it is not reported as income to you.

Make sure the deduction is taken at the correct level to remain compliant with IRS rules.

5. What If I Use the Home Office for Both Business and Personal Use?

You cannot take the deduction unless the space is used exclusively for business. That means no mixing in personal activities like watching TV, letting kids play, or using the room for hobbies. You must be able to prove that it’s a dedicated workspace.

If you have a portion of a room clearly divided and used only for business, that portion may still qualify as a deductible home office space.

Yes, you can deduct your home office through your LLC-as long as you follow IRS guidelines. The deduction usually appears on your personal tax return, even though it supports your business. Whether you use the simplified method or calculate actual expenses, this write-off can provide significant tax savings. Just make sure the space is used regularly and exclusively for business, and keep good records to back it up.