The Home Office Deduction Explained: How to Save Up to $1,500 a Year

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Sep 10, 2025

Discover how your home office could save you up to $1,500 a year in taxes! Many entrepreneurs miss this deduction, fearing qualification or audits. Learn about who can claim it, with real examples of clients saving big in just minutes. Explore two calculation methods: simplified vs. actual, and tips to maximize your write-offs while avoiding common mistakes. Uncover how this deduction can also unlock additional savings, like business mileage. Don't leave money on the table!

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ANECDOTE

30-Minute $1,100 Win

Mike saved a client $1,100 in about 30 minutes by creating a home office deduction.
That quick setup turned routine home costs into immediate tax savings.

INSIGHT

Turn Home Costs Into Pre-Tax Deductions

The home office deduction converts after-tax home costs into pre-tax business deductions.
This makes unavoidable living expenses work to reduce your taxable income.

ADVICE

Use Space Regularly And Exclusively

Do use a space regularly and exclusively for business to qualify.
Avoid personal use of that space, or you risk disallowing the deduction.

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Do you have a home office? The desk you’re sitting at could save you up to $1,500 a year in taxes.

Many business owners skip this deduction because they think they don’t qualify or fear an IRS audit. The truth is, most do qualify. One client of mine saved $1,100 in just 30 minutes by setting it up.

In this episode, Mike Jesowshek, CPA, explains who qualifies, the two ways to calculate it, how to document properly, and the mistakes that cause business owners to miss out. You’ll also learn how the home office deduction can unlock other tax savings like business mileage.

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Chapters

(00:00) Why Most Business Owners Skip the Home Office Deduction
The $1,500 opportunity that too many entrepreneurs ignore

(01:00) Real Client Example: $1,100 Saved in 30 Minutes
How a quick calculation turned wasted expenses into major tax savings.

(03:00) Who Qualifies? The 2 Rules You Must Meet
Regular and exclusive use + principal place of business (with the administrative loophole explained).

(09:00) Two Ways to Calculate: Simplified vs. Actual
$5 per square foot up to 300 sq ft vs. percentage of actual costs: When to use each method.

(13:00) Where to Take the Deduction (Sole Prop vs. S-Corp)
Schedule C, Form 8829, and how to handle it with an S-Corp accountable plan

(14:30) Common Mistakes That Kill Your Deduction
From mixing personal use to failing to document properly… What to avoid

(17:30) In Summary
Why this deduction can be worth $1,500+ every year, and how it also unlocks mileage deductions

Podcast Host:

Mike Jesowshek, CPA – Founder and Host of Small Business Tax Savings Podcast
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🎙 ABOUT THE PODCAST
The Small Business Tax Savings Podcast is your go-to resource for cutting-edge tax strategies to help entrepreneurs legally slash their tax bills. Hosted by Mike Jesowshek, CPA, this show breaks down complex tax topics into clear, no-fluff insights so you can keep more of your hard-earned money.