Work From Home Tax Deductions in 2026: What You Can and Cannot Claim
Remote work creates tax deduction opportunities that most employees miss. Here is what qualifies.
Critical distinction: W-2 employees CANNOT deduct home office expenses on federal taxes (this changed in 2018 with the Tax Cuts and Jobs Act). Self-employed individuals (1099, sole proprietors, freelancers) CAN deduct home office expenses. If you are a W-2 employee working remotely, you cannot claim a federal home office deduction — but check your state, as some states (like New York) still allow it.
Self-Employed Home Office Deductions
Simplified method: $5 per square foot, up to 300 sq ft = $1,500 maximum deduction. No tracking required — just measure your office. Regular method: calculate the percentage of your home used exclusively for business (150 sq ft office in a 1,500 sq ft home = 10%). Deduct 10% of mortgage/rent, utilities, insurance, repairs, and depreciation. The regular method usually yields a larger deduction but requires detailed record-keeping.
Other WFH Deductions for the Self-Employed
Internet service (business percentage). Phone bill (business percentage). Office supplies and equipment (100% if used only for business). Computer and peripherals (100% if dedicated to business). Office furniture (desk, chair). Software subscriptions. Professional development and courses. Mileage for business driving from your home office ($0.67/mile in 2026). These deductions add up quickly — a self-employed remote worker can easily deduct $3,000-8,000 annually.