As a content creator, your home is more than just a place to sleep. Your home is your office, studio, editing suite, and even your main filming location. So the big question is, can you write off your house when you do taxes?
While you may film in your living room, kitchen, or your backyard, or edit your videos at a desk in your bedroom, you can’t write off your entire home. That said, you can deduct a portion of your home-related expenses through the home office deduction.
What is the Home Office Deduction for content creators?
The home office deduction lets content creators and influencers write off a percentage of their home expenses if they use part of their home exclusively and regularly for business purposes. This can include portions of your rent or mortgage interest, utilities, homeowners’ or renters’ insurance, maintenance, and repairs.
Who Qualifies for the Home Office Deduction?
The IRS has two key things they use to determine whether your home office space qualifies for the home office deduction:
- The area must be used exclusively for your business
- The area must be used regularly for your business.
That means you can’t do other tasks in the area you use for your business, and you must use that area on a regular basis.
Both renters and homeowners can qualify for the deduction.
How Much Can You Deduct as an influencer?
The IRS outlines two methods for calculating your deduction: a simplified flat-rate option and a regular method based on the actual percentage of your home used for business (IRS.gov).
With the simplified method, you deduct $5 per square foot of your home office space, up to 300 square feet, for a maximum deduction of $1,500. It’s the easiest approach, but it may result in a lower deduction.
With the actual expense method, you calculate the percentage of your home used for your office and apply that percentage to expenses like rent or mortgage interest, utilities, and repairs. It involves more math and documentation, but your deduction could exceed the $1,500 simplified cap.
What Expenses Are NOT Deductible?
Even if you work from home full-time, you can’t deduct your entire mortgage or rent, personal expenses such as home décor or general house repairs, or spaces you also use for other activities.
What About Studio Space or a Rented Office?
If you rent a separate space (like a co-working office or a dedicated studio), you can fully deduct those expenses as business costs. Just make sure you’re using the space solely for work. The amount of time you spend in this space may affect your home office deduction, so track that closely.
How to Avoid Red Flags with the IRS as a Content Creator
As with any other deduction, documentation is critical. Keep records of all expenses you include in your home office deduction. Note any repairs that affect the office space that you will include in your deductible expenses.
Be reasonable. Unless your home is very large, it is hard to imagine a home office that would encompass your entire house or even half of it. So take care to write off a percentage that is accurate and makes sense.
Home Office Deductions Are A Part Of Your Business
You may have heard horror stories that the home office deduction triggers audits and raises all sorts of IRS red flags. Home deductions are a completely normal part of being a content creator and influencer, so it’s a pretty standard deduction you can take.
Just keep your expenses within reason, and you shouldn’t raise any serious questions from the IRS.
Frequently Asked Questions About the Home Office Deduction for Content Creators
Can I claim the home office deduction if I only work from home part of the time?
Yes, as long as you use a dedicated space exclusively and regularly for business, you can still qualify even if you also work outside the home.
Can I deduct my entire rent or mortgage?
No. You can only deduct the portion of your rent or mortgage that corresponds to the percentage of your home used for business.
Does the home office deduction trigger an IRS audit?
Not on its own. The deduction is common among self-employed individuals and content creators. As long as your claim is accurate and well-documented, it is a routine deduction.
What records should I keep for the home office deduction?
Keep receipts for rent or mortgage statements, utility bills, insurance payments, and any repairs specific to your office space.
Can I claim both a home office and a separate rented studio?
Yes, but the time you spend in your rented studio may affect your home office deduction, so track your usage carefully.
Work With A Content Creator Tax Professional
Understanding the home office deduction for content creators is just one piece of reducing your tax bill; there are likely other deductions you’re leaving on the table, too. Book a call with us to see how we can work together on your taxes, bookkeeping, and accounting.