Can a detached garage be a home office?

What the publication says

The Separate Structure paragraph of Publication 587 is two sentences. You can deduct expenses for a separate free-standing structure, such as a studio, workshop, garage or barn, if you use it exclusively and regularly for your business. And the structure does not have to be your principal place of business or a place where you meet patients, clients or customers. The earlier list of ways to qualify says the same thing in other words: in the case of a separate structure that is not attached to your home, in connection with your trade or business.

The Introduction broadens the term home to include structures on the property, such as an unattached garage, studio, barn or greenhouse. That is why the garage can carry the same expenses as a room in the house.

What the structure test replaces

For an office inside the house, the usual route is the principal place of business test, which looks at where the administrative or management work is done and whether there is another fixed location. For a separate structure, none of that is needed. The publication says the structure does not have to be your principal place of business. The two tests that remain are the ones in its name: exclusive use and regular use.

Exclusive use means a specific area used only for your trade or business. The publication says the area can be a room or other separately identifiable space and does not need to be marked off by a permanent partition. For a garage that means the space has no personal use. A garage that still parks the family car, or doubles as a gym, fails.

The greenhouse example

The publication gives one example for this category. Bobbie operates a floral shop in town and grows the plants for the shop in a greenhouse located at home. Bobbie uses the greenhouse exclusively and regularly for the floral shop business, so Bobbie can deduct the expenses for its use, subject to certain limitations. Notice what is not in the example: Bobbie runs the shop elsewhere, so the greenhouse is not the principal place of business, and customers do not visit. The structure rule is what makes the deduction available.

Garage conversions and shared use

The hardest case in practice is a garage that is partly converted. If one bay is walled off as a studio and used only for the business, that separately identifiable space can meet exclusive use, and you would use the area of that space for the business percentage. If the whole garage is shared with storage of household items, the shared part is not exclusive. The publication does not give a minimum share of personal items; the test is exclusive use of a specific area, and it says that a mix of business and personal use of the same area fails the test. Make the dividing line obvious and keep photos and a floor sketch.

The publication offers two exceptions to exclusive use, daycare and storage of inventory or product samples, and the storage exception has five tests of its own. See can you deduct home storage of inventory?

Which expenses and how much

A separate structure is still part of your home for expense purposes. The costs you can deduct are the same categories as for any home office: direct expenses only for the structure, deductible in full; indirect expenses for the whole property, deductible by the business percentage; and depreciation of the building if you own it, as nonresidential real property over 39 years for a home first used for business in 2025. The business percentage compares the area used for business to the total area of the home; see how to figure the percentage of your home used for business. Utilities for the property are still utilities and fall under the same limit.

As always, the deduction limit applies. A structure that produces little income will have part of its expenses carried over.

If you later sell the property

A separate building is treated differently on sale than a room in the house. The publication says that if you used a separate part of the property for business in the year of sale, you treat the sale as the sale of two properties and report the business part on Form 4797. See how a home office affects selling your home before converting a garage you plan to sell soon.

Sources

• IRS Publication 587, Business Use of Your Home (2025): Qualifying for a Deduction: Separate Structure. Read November 2, 2026.

Edition read: Publication 587 (2025), for use in preparing 2025 returns. Dollar figures and rates in the publication are for 2025; check IRS.gov/Pub587 and the instructions for Schedule C and Form 8829 for your tax year. This page summarizes the publication and does not replace it. Marked for human review.