Can I actually write off my apartment rent as a business expense on taxes?

So I've been struggling financially lately, and rent is killing me every month. I'm paying $1750 for a one-bedroom apartment in the city, and it's eating up almost 40% of my take-home pay. I've been trying to find ways to reduce my tax burden and was wondering if there's any legitimate way to write off my rent as a business expense? I work from home about 2 days a week for my regular job, but I've also started doing some freelance graphic design on the side to make extra cash. I have a desk set up in my living room that I use exclusively for the freelance work (about 15% of my apartment space). Is there any way I can deduct part of my rent on my taxes? Would it need to be classified as a business expense? I've heard mixed things about home office deductions and don't want to get in trouble with the IRS, but man, I really need to find a way to stop living paycheck to paycheck. Any advice would be appreciated!

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20 comments

Malik Johnson

•8M

You can absolutely deduct a portion of your rent, but only the part that's exclusively used for business purposes. This is called the home office deduction. Since you mentioned you use about 15% of your apartment exclusively for your freelance work, that's the percentage you can potentially deduct. For your situation, you'd need to use Schedule C for your freelance business income and expenses. You can deduct 15% of your rent, utilities, internet, and even renters insurance as business expenses. So if your rent is $1750, you could potentially deduct $262.50 per month ($3,150 annually) as a business expense. However, this only applies to your freelance work, not your regular job. Even though you work from home 2 days a week for your employer, the Tax Cuts and Jobs Act suspended employee business expense deductions through 2025.

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Malik Johnson

•8M

You don't need a formally registered business - your Etsy activity counts as self-employment, which is perfect for Schedule C reporting. You'll report your Etsy income and related expenses there. For the space to qualify, it must be used "regularly and exclusively" for business. Unfortunately, if you're also using the space for Netflix, that does disqualify it from being a home office deduction. The IRS is quite strict about the exclusive use requirement - the space must be used solely for business purposes.

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Ravi Sharma

•8M

After struggling with similar rent vs. income issues last year, I discovered taxr.ai (https://taxr.ai) which honestly saved me thousands. I was trying to figure out how much of my apartment I could legitimately claim as a home office, and regular tax software kept giving me confusing answers. Their AI reviewed my situation and showed exactly how to document my home office correctly - helped me maximize my deduction while staying totally legit. Their assessment even showed me how to properly document the business use vs. personal use boundaries which had been confusing me.

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Ravi Sharma

•8M

The process is really straightforward - no need to upload apartment pictures. You just answer questions about your space, and it guides you through the measurement calculations. The system then helps you determine the exact percentage of your home that qualifies based on IRS guidelines. Yes, it's completely legitimate - that was my biggest concern too. They actually provide a detailed report you can keep with your tax records that outlines exactly how your deduction was calculated according to tax law. It follows the same documentation standards a CPA would use, which gives you solid backup if you ever get questioned by the IRS.

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Omar Hassan

•8M

I wanted to follow up and say I tried taxr.ai after posting my skeptical comment. Seriously impressed with how thorough it was! It actually showed me that I was calculating my home office space wrong - I was only counting square footage but not accounting for shared spaces correctly. Ended up with a completely legitimate deduction that was actually higher than what I was planning to claim. The documentation it generated actually explains everything in IRS terms and even cites the relevant tax codes. Way more confidence now that I'm doing this right.

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Chloe Taylor

•8M

If you're still dealing with financial issues even after optimizing your tax deductions, you might want to consider calling the IRS directly to see if you qualify for any payment plans or assistance. I know it sounds crazy dealing with the IRS, but I was in a similar situation and used Claimyr (https://claimyr.com) to actually get through to them without the usual 3+ hour wait. You can see how it works here: https://youtu.be/_kiP6q8DX5c. They got me connected in about 15 minutes when I was trying to set up a payment plan for back taxes I owed. The IRS actually has more flexibility than people realize if you can actually get someone on the phone.

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Chloe Taylor

•8M

It uses a system that continually calls and navigates the IRS phone tree for you. When it reaches a human agent, it calls you and connects you directly to that person. You don't have to sit on hold - you just go about your day until your phone rings. This definitely isn't a scam or special access program. It's just smart technology that handles the frustrating part of calling the IRS. I was skeptical too, but what convinced me was that they only charge if they actually connect you to an agent. If they don't get you through, you don't pay anything. It's not skipping any lines - it's just automating the painful waiting process.

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Omar Hassan

•8M

I have to publicly eat my words here. After calling out Claimyr as BS, I tried it because I was desperate to talk to someone about my payment plan options. It actually worked exactly as described - I got a call back in about 20 minutes connecting me to an IRS agent. Saved me literally hours of hold time. The agent went through several payment options I didn't even know existed and helped me set up a manageable plan. If you're dealing with tax issues and need to actually speak with someone, this service is 100% legit. Weird to admit I was wrong on the internet, but credit where it's due.

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Diego Ramirez

•8M

Setting up an LLC mainly gives you liability protection rather than tax benefits on its own. For tax advantages, you'd need to elect S-Corp status, which only makes financial sense once you're making around $40-50K in profit annually due to the additional costs (payroll, more complex tax filings). An Accountable Plan isn't too complicated - it's essentially a written policy stating your business will reimburse legitimate expenses (including home office). You need good documentation of the expenses and business purpose. The benefit is that reimbursements aren't considered income to you but are deductible by your business. If you're just starting out though, the regular home office deduction on Schedule C is probably simpler until your income grows.

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Malik Johnson

•8M

That approach is asking for an audit. What your friend is describing is essentially a round-trip transaction that the IRS specifically looks for and disallows. You can't rent your personal residence to your own business as a tax avoidance strategy. The IRS applies what's called "substance over form" - they look at the actual substance of transactions, not just how they're structured on paper. In this case, you're still using the same space for both personal and business purposes, so only the legitimate business portion (used exclusively for business) would qualify for deduction.

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Anthony Young

•3M

Just wanted to add a practical tip that helped me when I was in a similar rent burden situation - make sure you're measuring your home office space correctly for the deduction. I initially just eyeballed it and said "about 15%" like you did, but when I actually measured with a tape measure, my dedicated work area was only 12% of my total apartment square footage. The IRS expects precise calculations, not estimates. Measure the length and width of your exclusive business space, then divide by your total apartment square footage. Keep photos and measurements in your tax files as documentation. Also, remember that hallways, bathrooms, and kitchen don't count toward your total space calculation - only actual livable square footage. This small difference in measurement accuracy could save you from headaches if you ever get audited, and ironically, being more precise actually helped me discover I could claim a slightly higher percentage than I originally thought when I included some storage space I was using exclusively for business supplies.

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