How the Home Office Deduction Works for Self-Employed in 2026

Lucas and Luna break down the home office deduction for the self-employed in 2026, focusing on the two calculation methods—simplified ($5 per square foot, max $1,500) and regular (actual expenses, depreciation). They walk through a concrete example: a freelance graphic designer earning $80,000, with a 200-square-foot office in a 2,000-square-foot home. Lucas explains the exclusive-use test, the principal-place-of-business test, and common red flags like deduction exceeding business income or home sale depreciation recapture. Luna asks about the simplified vs regular trade-off, and they compare both scenarios. The episode closes with a forward-looking question about whether the home office deduction might adapt to hybrid work. A light donation segment for Buy Me a Coffee is woven in naturally. #HomeOfficeDeduction #SelfEmployedTax #TaxDeductions #IRS #SmallBusinessTax #FreelancerTaxes #SimplifiedMethod #RegularMethod #DepreciationRecapture #ScheduleC #Form8829 #PrincipalPlaceOfBusiness #ExclusiveUseTest #TaxStrategy #Finance #FexingoBusiness #BusinessPodcast #TaxPlanning Keep every episode free: buymeacoffee.com/fexingo