The Home Office Deduction for Trades and Service Businesses

The home office deduction gets dismissed by a lot of trades business owners as something for remote office workers, not for someone who spends the day on job sites. That assumption misses how the deduction actually works: it's available to a business owner who uses part of their home regularly and exclusively for business, even if the physical work itself — the actual HVAC repair, the electrical job, the plumbing service call — happens somewhere else entirely.

For a trades business, that 'regular and exclusive use' space is usually where the administrative side of the business actually gets run: scheduling jobs, invoicing customers, ordering materials, handling calls, managing the books. If that work genuinely happens from a dedicated space at home — a spare room, a converted garage office, a finished basement area used only for the business — it can qualify, even though the crew and the trucks are somewhere else most of the day.

The word doing the most work in that qualification is 'exclusive.' The space has to be used only for business — a home office that doubles as a guest room, or a corner of a room also used for personal purposes, generally doesn't qualify under the regular method, because the exclusive-use test is applied strictly. There's a simplified method available (a flat rate per square foot, up to a cap) that avoids some of the recordkeeping the regular method requires, but it doesn't change the underlying exclusive-use requirement.

Once the space qualifies, the deduction covers a proportional share of real home expenses — mortgage interest or rent, utilities, insurance, repairs, and depreciation on the home itself — based on the percentage of the home's square footage the office represents. For a business owner who's been assuming this doesn't apply to them because the actual work happens on job sites, that proportional share can be a real, previously-missed deduction.

The qualification question is specific to how the space is actually used, not a general assumption either way, and it's worth an honest look before either claiming it incorrectly or assuming it doesn't apply. That's the review we run as part of a broader deduction pass for trades clients — checking the actual use of the space against the exclusive-use rule, rather than defaulting to 'that's not for people like us.'