In order to write off the costs of working from home, you should know which types of expenses you can deduct. Among the costs you can tax-deduct are:
- Utility bills (gas, electric, water)
- Home contents and buildings insurance
- Telephone, internet, and cell phone bills
- Part of your rent or mortgage
- Security costs
- Repair costs
- Office equipment
- Office furniture
The IRS generally distinguishes between direct expenses – items or services that are used solely for business purposes; indirect expenses that include items and services only partially used for business; and unrelated expenses that cannot be deducted.
Examples of direct expenses include rooms only used for work, painting or maintenance costs of the home office, office equipment or a dedicated business mobile phone. Indirect expenses include insurance and utility bills because when you work from home you’ll be using only a percentage of your water, heating, and electricity for your home office. Unrelated expenses are not deductible and would include maintenance jobs of unrelated home structures, e.g. cleaning the gutters or painting a fence.