You can deduct the portion of rent for a dedicated home office room under IRS rules.

Can you write off rent when you run a business from a home office?

Imagine April, a small business owner who rents a cozy apartment. She has a spare bedroom that she uses exclusively for her business—no store in the back, no clients popping in, just a neat, dedicated workspace. A lot of people wonder: does that scratch of rent count toward her tax bill? The short answer is yes—when the space is used exclusively for business, a portion of the rent can be deducted. The longer answer comes with a few simple steps and a few important rules, and that’s what we’ll unpack here.

April’s setup: a room that’s all business

Here’s the core idea in plain terms. If you use a part of your home strictly for business, you’re allowed to prorate your housing costs to reflect that business space. In April’s case, her dedicated business room is a distinct area in her home that isn’t used for personal activities. Because of that exclusive use, she can factor out a share of her rent—the portion that corresponds to the business room—and deduct it from her taxable income.

Think of it like this: the home is a big pizza, and the business space is a single slice. If that slice represents, say, 10% of the total pizza, then 10% of the rent can be treated as a business expense. That’s the basic principle behind the home office deduction under IRS guidelines.

What counts as exclusive and regular use?

Before we go further, a quick guardrail: the space has to be used exclusively for business, and it has to be used on a regular, ongoing basis for that business. If the room is used for personal projects, lounging, or guests’ stays, that specific area wouldn’t automatically qualify for the home office deduction if it lost its exclusive character. In April’s story, the room is dedicated to the business only, which keeps the door open for a deduction.

How to calculate the deduction (the practical part)

If you’re in a situation like April’s, here’s a straightforward way to estimate the deduction under the regular method.

1. Measure the space

• Find the square footage of the dedicated business room.

• Find the total square footage of the home.

2. Compute the business-use percentage

• Divide the business-room square footage by the total home square footage.

• Example: if the business room is 200 square feet and the home is 2,000 square feet, the percentage is 200/2000 = 10%.

3. Apply the percentage to rent

• Multiply your monthly rent by that percentage.

• If April pays $1,500 in rent each month and her business room makes up 10% of the home, the deductible rent portion is $150 per month.

4. Annualize it

• Multiply by 12 to get an annual figure. In this example, $150 × 12 = $1,800 for the year.

5. Record and report

• If you’re self-employed, you’d typically report these figures on Form 8829 (Expenses for Business Use of Your Home) as part of your regular business expenses. The result flows to your profit or loss on Schedule C, which in turn affects your overall taxable income.

• If you’re using a simplified method instead of actual expenses, the calculation looks a little different (a flat rate per square foot, with a maximum of 300 square feet), but the essential concept—deducting the business-use portion of home costs—still applies.

What about other home costs?

Rent is the star here, but the logic applies to other eligible home expenses too. Under the regular method, you can generally allocate a share of things like utilities, insurance, and depreciation (for owned property) to the business. In April’s scenario, if she wants to expand beyond rent, she could consider those items as well, provided they’re directly tied to the space used for business and properly calculated. It’s like building a small toolkit: rent, utilities, and insurance can all be part of the same toolbox, as long as you allocate them correctly to the business space.

The big caveat: you either use the space exclusively for business or you don’t

A common question is whether you can claim a deduction if the room is sometimes used personally. The tax rules are clear: for the home office deduction to apply under the regular method, the space needs to be used regularly and exclusively for business. If you share the room with personal activities, the deduction may be limited or disallowed for that space. In practice, many people who have a multipurpose room don’t qualify for a home office deduction based on that tool alone, unless part of the home is clearly dedicated to business use. For April, the dedicated room makes the math clean and the deduction straightforward.

Does it ever make sense to use a simplified method?

Yes, there’s a simplified option that can save time and paperwork. The simplified method doesn’t require measuring your home or calculating the exact share of costs. Instead, you use a standard rate per square foot for up to a maximum square footage (often 300 square feet). For someone with a small home office, this can be a convenient alternative. The result is still a deduction for the business-use portion of the home, but the mechanics are a bit less fiddly. It’s worth comparing both methods to see which yields a bigger deduction or aligns better with your record-keeping style.

Why this matters in real life

Tax rules can feel like a maze, especially when you’re juggling a business and a home life. Here’s why this particular deduction matters:

• It lowers taxable income. By subtracting the business-use portion of rent, you’re effectively saying, “This much of my housing costs is tied to earning income.” That lowers the amount of income subject to tax, which can translate into real savings come tax time.

• It’s a fair reflection of business costs. If you’re using a part of your home as your work base, you’re absorbing some of the costs of that workspace in your business. It’s only right that those costs be recognized in your books.

• It encourages careful record-keeping. When you know you’ll be reporting a deduction tied to a specific space, you’re nudged to keep good records of the space dimensions, rent payments, and how you allocate expenses. Good habits here pay off later.

A few practical tips to keep you on the right track

• Keep a simple floor plan. A quick sketch with measurements will do. It makes your percentage calculation transparent and easy to defend if the IRS ever asks questions.

• Document your exclusive-use status. A quick note or a photo of the space that shows it’s used only for business helps avoid confusion later on.

• Separate the numbers from your personal budget. Use a dedicated bank account or ledger for business expenses so you don’t mix personal and business costs.

• Check the current rules. Tax rules shift over time. When in doubt, a quick lookup of the latest IRS guidance on Form 8829 and the home office deduction is worth a moment of your time.

A natural detour: a casual comparison with a couple of other common deductions

If you’ve ever sat with a tax form and thought, “This is a lot,” you’re not alone. Home-office deductions sit alongside other business write-offs, but they work a bit differently. For someone who rents and uses a home office, the focus is on the space actually used for business. Compare that with, say, vehicle expenses or travel costs, where the rules and calculations can be more expansive or require different support. The key is clarity: match each deduction to the purpose it serves, and document how you reached your numbers.

Connecting the ideas to the bigger picture

We’ve walked through a scenario with April and her dedicated business room. The heart of the story is simple: when a portion of your home is used exclusively for business, you can claim that portion as a deduction against your income. It’s not about getting a windfall; it’s about aligning your tax return with the reality of how your business uses your home.

If you’re curious to see how this plays out in real life, you’ll find plenty of examples and calculators that let you plug in your own numbers. The human side of taxes isn’t about clever tricks; it’s about honest accounting—tracking how you earn and what you spend to support that earning. A well-done home office deduction is a small but meaningful reflection of that balance.

Closing thoughts: April’s takeaway

So what’s the takeaway from April’s scenario? The true statement is clear: April can deduct the portion of rent for her dedicated business room. It’s a clean application of the home office concept, rooted in the idea that business expenses should reflect the net income generated by that business. The space she uses for business, measured against her total home, creates a logical and defendable deduction. And that’s the kind of tax insight that helps everyday business people feel a little more confident when they file their returns.

If you’re exploring this topic further, consider how your own workspace shapes your taxes. Do you have a dedicated corner that’s truly business-only? If so, you may be sitting on a simple, legitimate deduction that aligns with the spirit of prudent business finances. And if you’re ever unsure, a quick consult with a tax professional or a trusted tax software guide can help you confirm the best path for your unique situation. After all, a clear, honest accounting mindset is one of the best tools any small business owner can have.