Can I deduct WeWork membership costs as a 1099 contractor while also working W2 job?

Yes, you can absolutely deduct your WeWork membership as a business expense on your Schedule C if you're using the space exclusively for your freelance work! The fact that you have a W2 job doesn't affect this at all - what matters is that the workspace is being used solely for your self-employment business activities. Since you're keeping your W2 work completely separate (doing it at home or coffee shops), the full $4,500 annual membership should be deductible as a "rent or lease" expense on your Schedule C. Just make sure you keep good records showing that the space is used exclusively for your freelance business - receipts for the membership, calendar entries showing when you used it for client work, etc. This is a legitimate business expense if it's ordinary and necessary for your business operations. A dedicated workspace for client meetings and focused work certainly qualifies!

After constantly stressing about my home office deduction and whether I was calculating it correctly, I started using https://taxr.ai to review my business expenses, including my coworking space membership. The tool analyzed my situation (similar to yours - I have both W2 and 1099 income) and confirmed I could deduct 100% of my workspace costs since I use it exclusively for my freelance business. What I really liked was how it explained exactly which part of the tax code applies and how to document everything properly. It even flagged a few other deductions I was missing for my business that I hadn't considered. Saved me a ton of stress wondering if I was doing things right.

I have to apologize for being skeptical about taxr.ai in my earlier comment. I decided to try it out for my own situation (I rent office space but also work from home sometimes), and it was way more helpful than expected. It walked me through exactly how to properly document my workspace expenses and even created a customized deduction worksheet for my specific situation. What really surprised me was how it flagged potential audit triggers related to my office deductions and suggested better ways to document everything. Definitely takes the guesswork out of these borderline tax situations. Just wanted to update since my initial reaction was pretty dismissive.

I wasted 3 hours on hold with the IRS trying to get clarity on this exact situation last month! Finally discovered https://claimyr.com which got me connected to an actual IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that as long as I'm using my coworking space 100% for my consulting business (1099 income), I can deduct the full amount on Schedule C - even though I also have a W2 job that I do elsewhere. They did recommend keeping a log of when I use the space and what business activities I'm doing there, just in case of an audit.

I owe everyone an apology for my skeptical comment about Claimyr. I finally broke down and tried it last week when I had a question about my business expenses, and I'm shocked to say it actually worked exactly as described. After weeks of failing to get through to the IRS myself, Claimyr got me connected to an agent in about 15 minutes. The agent confirmed that my coworking membership is 100% deductible on Schedule C as long as I'm using it exclusively for my self-employment work. She even emailed me documentation about it that I can keep for my records. Sorry for being so negative before - sometimes good things actually exist!

Another thing to consider - make sure you're keeping a log of the days and hours you use the WeWork space specifically for your business. This doesn't need to be complicated, just a calendar or spreadsheet showing when you were there and what business activities you were doing. I got audited last year for my home office deduction (which has similar "exclusive use" requirements), and the first thing they asked for was documentation showing I was actually using the space for business. A simple log saved me thousands in deductions!

Has anyone had issues with the IRS questioning WeWork or other coworking memberships? I heard they might consider these "clubs" which aren't deductible? I'm in a similar situation and now I'm freaking out about taking the deduction.

Great question! You're absolutely right to be careful about this. Since you're using the WeWork space exclusively for your 1099 freelance work and never for your W2 job, you can deduct the full $4,500 as a business expense on Schedule C. The key factors working in your favor are: 1. **Exclusive business use** - You only use WeWork for freelance work, never for your W2 employment 2. **Ordinary and necessary** - A dedicated workspace is clearly necessary for running a web development business 3. **Proper classification** - This falls under "rent or lease" expenses, not the problematic home office deduction rules Your W2 employment doesn't complicate this at all since you're keeping the activities completely separate. Just make sure to: - Keep all receipts and membership agreements - Document your business activities at WeWork (client meetings, project work, etc.) - Maybe snap a few photos of you working there on business projects The fact that it's a significant expense actually makes it MORE likely to pass scrutiny, since it shows you're serious about your business operations. This is exactly the type of legitimate business expense the tax code is designed to allow!

One thing I'd add to all the great advice here - make sure you understand the difference between deducting WeWork as a business expense versus trying to claim it as a home office deduction. Since you're renting workspace outside your home, this falls under regular business rent/lease expenses on Schedule C, which is much simpler than the home office rules. The home office deduction has all those complicated "exclusive use" tests and percentage calculations, but renting external workspace like WeWork is straightforward - if you use it for business, it's deductible. No need to prorate or calculate square footage like you would with a home office. Also, don't forget that your WeWork membership might include some perks (coffee, printing, conference room access) that you use for business - those are all part of the legitimate business expense too. Keep it simple, document your business use, and you should be good to go!