How Renting an Office Space Actually Raised My Take-Home Pay

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  • While some self-employed workers work from a home office, others choose to rent out a separate office space away from home.  
  • A rented office gave this writer a tax deduction, greater productivity, and a better work-life balance.  

Renting a separate office space comes at a cost -- but it could offer other financial benefits. 

I've been a full-time freelancer for several years now. As I've grown over the years, I've changed how I operate my business to boost my income, improve my productivity, and live a better life. 

I worked from a home office for several years, but recently realized it wasn't a forever solution for my needs. Earlier this summer, I started renting out a separate office space, and this decision turned out to be a good business move for me. 

Working from home doesn't work for everyone 

Working from home has many advantages. You can work in your pajamas without being judged, don't have a commute, can hang out with your furry co-workers, and can take more breaks. 

For many years, I enjoyed working from home. But I realized the main reasons I enjoyed working at home were that I didn't have a traditional salaried job or a boss. I could still experience many of the same benefits of working for myself away from my house. 

Living and working in the same space constantly was taking its toll. I decided to look for an office rental to create a better separation between my work and personal life. 

Working from an office is a win for me 

So far, working from a separate office space has worked well for me. Here are some ways this change has benefited me financially:

A bigger tax deduction

When I worked from home, I qualified for the home office deduction. This deduction is calculated based on the space in your home that you use exclusively for work. Since my mortgage and home utility costs were affordable, my yearly home office deduction wasn't significant. 

Now that I work from a separate office space and use that space only for work, 100% of my office rent qualifies as a business expense and is tax deductible. 

Tax deductible business expenses reduce my taxable income, saving me money on my tax bill. 

I'll boost my tax deductions by more than $3,000 yearly by having an office space away from home. 

A boost in productivity means greater income 

As a freelance writer, I don't get paid if I'm not writing. That means I'm not making any money if I take too many breaks to handle household chores or watch funny cat videos. 

Working from home made it easier to get distracted, which meant I got less work done. I find that working in a separate office space has boosted my productivity. When I arrive at work, I'm ready to write, and I feel motivated to make each day successful. 

While I pay rent each month, I'm finding I'm bringing in more income due to a boost in productivity. Even after the rent is paid, I'm making more than I was in previous months. 

I consider that a win for my business and my bank account

Getting an office space has improved my life in other ways

Working in a separate office space has also helped me in other ways. I enjoy my daily routine of getting ready and leaving the house each morning. Since my office is within a couple of miles of my home, it doesn't feel like I have a commute. 

This change has also improved my mood, helped me appreciate my free time at home, and helped me establish a better work-life balance. As a freelancer, it's easy to get into the habit of working constantly. But that isn't a healthy long-term habit. 

Renting an office space has increased my business tax deductions, raised my take-home pay, and made me a more productive worker. 

While working from home has its perks, don't dismiss the idea of working away from home. Whether you're a remote worker or freelancer, it may be a smart financial move to consider an alternate work environment. 

If you're looking for tips related to important money matters, check out our personal finance resources

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