Can renters deduct a home office?

What the publication says

Renting does not disqualify you. The Introduction to Publication 587 says the term home includes a house, apartment, condominium, mobile home, boat or similar property that provides basic living accommodations. In the Rent entry the publication says: if you rent the home you occupy and meet the requirements for business use of the home, you can deduct part of the rent you pay. To figure your deduction, multiply your rent payments by the percentage of your home used for business.

The publication adds a contrasting sentence for owners: if you own your home, you cannot deduct the fair rental value of your home, though you can claim depreciation. The difference is one of the practical advantages renters have, because rent is a real payment made to someone else and is usually the largest single housing cost.

The qualification tests still apply

Rent is an expense, not a qualification. Before you reach the arithmetic, the space has to pass the tests in the Qualifying for a Deduction section. Publication 587’s Figure A, a flowchart, sends you to no deduction if no part of your home is used in connection with a trade or business, or if you are using that part of your home as an employee, or if the use is not both regular and exclusive. If those answers are fine, the flowchart allows the deduction when the space is your principal place of business, a place where you meet patients, clients or customers, or a separate structure.

For a renter, the separate structure route is unusual, because you probably do not control a free-standing building. The principal place of business route is the common one for a freelancer or a sole proprietor who does administrative work from a spare bedroom.

A worked example

This example is not from the publication. A self-employed designer rents a 900 square foot apartment for $2,000 a month and uses a 90 square foot bedroom only for the business. The business percentage is 10%. The designer used the room for all 12 months. Rent paid is $24,000, and 10% is $2,400. The calculator above does this arithmetic, and it lets you reduce the months if you started later in the year.

If the same designer began business use on July 1, the publication’s part-year rule applies: you cannot deduct expenses incurred during any part of the year you did not use your home for business. Six months of rent is $12,000, and 10% of it is $1,200.

Other expenses a renter can add

Rent is not the only line. Renters insurance covering the home, utilities and general repairs the tenant pays are indirect expenses, deductible by the business percentage. Direct expenses, such as painting only the office, are deductible in full, though the lease may restrict what you can do to the unit. Depreciation of the home does not apply to a renter because there is nothing to depreciate; the publication discusses depreciation for those who own the home. Furniture and equipment you use in the office are separate business assets covered elsewhere in the publication.

The deduction limit and carryover

Rent is one of the expenses that the deduction limit caps. If gross income from the business use of your home is less than your total business expenses, the allocable rent, insurance and utilities are limited to the gross income minus the business part of mortgage interest and taxes (which a renter generally does not have) and minus business expenses unrelated to the use of the home. Disallowed expenses carry over to the next year in which you use actual expenses. A first-year business with little income can therefore find part of the rent waiting for later.

Records a renter should keep

The recordkeeping section of the publication says you do not have to use a particular method, but your records must show the part of your home you use for business, that you use it exclusively and regularly for business as your principal place of business or as the place where you meet clients, and the expenses for the business part. It tells you to keep canceled checks, receipts and other evidence of expenses you paid. For a renter that means the lease, proof of each rent payment, and a simple floor plan with the office measured, kept for as long as the records matter for any tax law, which is usually the later of 3 years from the return due date or filing date, or 2 years after the tax was paid.

Simplified method for renters

The simplified method is available to renters too. It multiplies the allowable area, up to 300 square feet, by $5 and is capped by the gross income from the business use of the home less business expenses unrelated to the home. A renter with a small office and high rent will usually do better with actual expenses, and the reverse is more likely with low rent and a larger room. The simplified vs regular home office deduction calculator compares them. To see how a deduction changes your overall bill, use the self-employment tax calculator.

Sources

• IRS Publication 587, Business Use of Your Home (2025): Actual Expenses: Rent; Introduction; Figure A. 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.