Working from home comes with some pretty sweet perks, right? More flexibility, no commute, and the freedom to set up your working space exactly how you like it.
But there’s one part that trips a lot of small business owners up – figuring out what you can claim when tax time comes around.
Suddenly, you’re staring at receipts thinking…hang on, what counts here? Internet? Maybe. Rent? Partly. That coffee that basically kept you functioning through client calls? Unfortunately… probably not.
Let’s break down exactly what you can claim in 2026 without overthinking it.
Quick heads up before we start: These working from home tax deductions mainly apply to business owners, freelancers, and self-employed people. Most W-2 employees can’t usually claim home office expenses on their federal tax return unless they fall under a specific classification, like statutory employees.
What counts as a business expense when WFH
The line between business and just living life gets blurry pretty quickly when you’re running your business from home. Your Wi-Fi is used for client meetings, sure, but it’s also used for binge-watching Netflix on the weekends. Plus, the heating doesn’t exactly switch off at 5pm, and your home is rarely exclusively a workspace.
This can all leave you a bit unsure about what counts when it comes to business expenses – and that’s totally understandable.
But don’t worry, because we’ve broken it all down for you…
Internet and phone
When you work from home, expenses like internet and utilities are often treated as shared household costs. Rather than trying to split individual bills based on rough estimates of “work vs personal” use, the standard approach is based on the space you use.
In practice, this means calculating the percentage of your home dedicated exclusively to your workspace. If your office takes up 12% of your home’s total square footage, you can generally apply that same 12% to your relevant household utility bills.
Keep a simple record of how you arrived at your calculation – nothing fancy, just enough to support your figures if you ever need to back them up.
Electricity and heating
Next, you can claim a portion of your electricity and heating based on how much of your home is used for work and how often you’re working there.
Like your phone and internet, you just need to figure out the percentage of your home’s total square footage that your office takes up, and then apply that same percentage to your eligible utility costs.
It won’t cover the entire bill, but when you track it properly, those percentages can add up to a noticeable difference by the end of the year.
Rent or mortgage interest
If you’re working from a dedicated space at home, you may be able to claim a portion of your rent or mortgage interest. It’s usually worked out based on the size of your workspace compared to the rest of your home, and how often you’re using it for work.
It might not sound like much month to month, but over the year it can really add up – and it’s one of those WFH reliefs people often miss just because they don’t realise they can claim it.
Office equipment and furniture
Desks, chairs, monitors, laptops – if it helps you do your work, it generally falls into this category.
But here’s the catch: for something to qualify properly, it needs to be used exclusively for business purposes. If it’s mixed use – for example, your kids using the laptop for schoolwork, or your office chair is really the same one you drag back to the kitchen table in the evenings – that usually takes it out of deductible territory.
Where it is used exclusively for your business, some items can be claimed in full, while others are written off over time depending on cost and tax rules.
Either way, this is often where a lot of your real setup costs get recovered – but only when the use is clearly business-only and properly kept separate from personal or household use.
Software and subscriptions
If it keeps your business running, there’s a good chance it counts as a business expense.
We’re talking about everything from your accounting and design software to your CRM and project management tools.
Even those small monthly subscriptions – the ones that feel like pocket change – really start to add up by the end of the year. So, if it helps you run the business, it’s usually fair game.
And it’s also worth noting that some subscriptions can sit in a grey area. For example, services like music or streaming platforms may be treated as part of your general household costs and could be apportioned using the same home office ratio, where they’re reasonably connected to the use or enjoyment of your home while working.
Repairs and maintenance
Small fixes to your home office setup can often be included – think repairing equipment or maintaining the space you use for work.
The main thing to keep in mind is the distinction between your office and your home. If a repair is for your dedicated workspace, you can generally claim the full cost.
If it’s for the wider house – like fixing the heating or general maintenance that affects the whole property – the cost is usually split using that same space-ratio percentage we talked about earlier.
Think of it this way: if it’s a dedicated business space, you’re looking at full relief. If it’s a shared household cost, it’s apportioned.
What you can’t usually claim when working from home
While working from home can open the door to a few useful tax claims, there are still clear limits on what qualifies. Just because something happens in your home doesn’t automatically make it a business expense.
Here’s a quick breakdown of the things you generally can’t claim when working from home:
- Your full rent or mortgage repayment (only a fair portion, if anything)
- Your weekly grocery shop or household food costs
- Personal shopping (clothes, home bits, anything not used for work)
- Commuting costs (you’re already at work)
- Personal phone use or non-work calls/data
- Holidays or travel that isn’t directly business-related
- Kids’ expenses or family costs
- Everyday living costs that would exist whether you worked or not
Wrapping up
By now, you should have a much clearer idea of what you can and can’t claim when working from home. Remember, just because a cost exists in your home doesn’t automatically make it a business expense. It all comes down to how it’s used, and being able to separate personal from business use in a fair way.
Getting this right helps keep things compliant, and it also means you’re not leaving money on the table when it comes to legitimate claims, like internet, utilities, software, and more.
Need a hand making sense of it all?
If you’re still unsure what you can claim, or you just want someone to take it off your plate, Tax Savvy Advisors is here to help.
From breaking down your home office setup to identifying the expenses you’re actually entitled to claim, our tax professionals make the whole thing a lot less stressful (and a lot more accurate).
It’s really about making things clearer and easier! We help you stay on top of what you can claim, and make sure you’re not leaving money on the table just because the rules feel a bit messy.
Take our Fit & Pricing Quiz to find the package that fits your needs.
