Why it matters
The deduction can be valuable for a client who works from home, but the regular and exclusive use test is strict. A space that is also a guest room or a family room does not qualify, and a wrong claim is a common audit issue.
Example
A sole proprietor uses a spare room only for client work and business records. The preparer calculates the business percentage of the home and applies it to the qualifying expenses, using the simplified or regular method.
Related terms
Questions about Home office deduction
Can an employee claim the home office deduction?
The deduction for unreimbursed employee expenses is generally suspended for federal purposes. A self-employed taxpayer or a business owner may still qualify under the home office rules.
What does exclusive use mean?
The space is used only for business, not as a guest room, storage room or family area. A desk in a shared room usually does not qualify.