This article is intended for educational purposes only and is not tax advice. For guidance on your personal situation, please contact a tax professional.
Most of us would like to pay the IRS as little money as possible each year. And that's where tax credits and deductions come in.
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A tax credit is a dollar-for-dollar reduction of your tax liability, while a tax deduction allows you to exempt a portion of your income from taxes. If you're in a high tax bracket, claiming the right deductions could result in a huge amount of savings.
There's one popular tax deduction you may be thinking of claiming this year. Before you do, make sure you actually qualify.
Are you really eligible for a home office deduction?
Working from home is more common these days than it was prior to 2020, when the pandemic forced countless companies and employees to adopt that arrangement. And if you work from home, you may be inclined to try to take a home office deduction on your tax return.
But before you do, it's important to make sure you actually qualify. Believe it or not, you could work from home on a full-time basis and still not be eligible.
"This deduction is only for taxpayers who are self-employed," says Mark Steber, Chief Tax Officer at Jackson Hewitt. "It is not for employees who work remotely from a home office."
In addition to the self-employment requirement, there are other criteria for being able to claim a home office deduction.
First, your home office has to used exclusively for work purposes. If you have a room in your home that doubles as a dining room/office, you don't qualify.
Secondly, your home office must constitute the primary location you work from. If you rent office space that you use four days a week and have a dedicated space at home for one workday a week, you also don't qualify.
Don't make a big mistake
If your goal is to lower your 2025 tax bill as much as possible when you file your tax return this season, you may be inclined to chase as many deductions as you can. But Steber says it's important to be cautious -- especially in the context of the home office deduction, which tends to be subject to misinformation.
"Please be on the lookout for bad advice on social media related to this tax deduction," Steber says. "If a taxpayer tries to claim the deduction and they don't qualify, it will cause a delay in processing a tax return."
If you want to be sure you're claiming credits and deductions you're eligible for, talk to a tax professional, Steber says. That way, you get the peace of mind that comes with knowing you're not making a huge mistake.
