Blog · 16 October 2026

Home Office Deduction Under §280A and Form 8829: Exclusive Use, Principal Place of Business and the Simplified Method for US CPA Firms

By Keshav Bansal, CA

Self-employed clients with a rented shop, clinic, or co-working desk often assume a home office deduction is off the table. Emerald Tax & Accounting (Valerie McLaughlin, October 1, 2026) flagged that myth again for 2026: under IRC §280A and IRS Publication 587, a home office used exclusively and regularly for administrative or management work can still qualify as the taxpayer’s principal place of business when there is no other fixed location for substantial admin work—even if the client also works at customer sites. For US CPA firms, the questions are eligibility, method choice (simplified $5/sq ft vs Form 8829), and mileage when the home office is the principal place of business.

Exclusive and regular use under §280A(c)

IRC §280A generally disallows dwelling-unit deductions, then carves out business use in §280A(c). Per Publication 587 (2025) and IRS Topic no. 509, a Schedule C home office usually must use a specific area of the home exclusively for the trade or business (a room or other separately identifiable space; permanent partitions are not required) and regularly for business (incidental use does not count). Pub. 587’s classic fail is the attorney whose family also uses the den for recreation. Exclusive-use exceptions are narrow (inventory/product-sample storage and daycare). The activity must be a trade or business, not a hobby—see our hobby vs business §183 guide when the file looks personal.

Do not confuse this with the Augusta Rule under §280A(g), which can exclude rent when a residence is actually rented for fewer than 15 days in the year. Our Augusta Rule §280A(g) and Sinopoli guide covers that short-rental exclusion. Satisfying §280A(g) does not prove §280A(c) home-office eligibility, and vice versa.

Principal place of business after Soliman

A taxpayer can have more than one business location, including the home. Topic 509 and Pub. 587 say a portion of the home may qualify as the principal place of business if it is used exclusively and regularly for administrative or management activities and the taxpayer has no other fixed location where substantial administrative or management activities for that trade or business are conducted. Pub. 587 lists billing, books and records, ordering supplies, setting appointments, and writing reports as examples. Having suitable space elsewhere—or doing substantial non-admin work at customer sites—does not by itself disqualify the home office if the substantial admin work stays at home.

McLaughlin’s Emerald Tax piece (October 1, 2026) ties that rule to Soliman: Congress addressed the Supreme Court’s principal-place result for tax years beginning after 1998, and Pub. 587 now illustrates a qualifying home office with an anesthesiologist who keeps a dedicated room for scheduling, billing and related admin while working at hospitals. Paraphrasing Emerald (not a quotation): self-employed people with an outside workplace can still deduct a qualifying home office when those admin tests are met. Document where bills are cut and books are kept—not only where services are delivered.

Simplified method vs Form 8829

Once eligibility is clear, choose a computation method for the year. Per the IRS simplified option page (reviewed or updated March 2, 2026), Revenue Procedure 2013-13 and Pub. 587:

• Simplified method: $5 per square foot of qualified business-use space, capped at 300 square feet (generally up to $1,500). Claimed on Schedule C without Form 8829. No home depreciation (or later recapture) for simplified years; mortgage interest and real estate taxes stay in full on Schedule A. Capped by business income from the home-office use; excess cannot be carried forward.
• Regular (actual-expense) method: Allocate direct and indirect home expenses and depreciation on Form 8829. Excess limited by the gross-income ceiling may carry forward to a later actual-expense year.

Either method may be chosen for any year on a timely filed original return; once chosen, the election is irrevocable for that year. Switching from simplified to actual expenses later requires the appropriate MACRS optional depreciation table for subsequent depreciation.

Employees generally cannot claim; mileage often can

The IRS simplified-option page states that taxpayers can no longer claim a home-office deduction as an employee, because miscellaneous itemized deductions for employee business expenses were eliminated for tax years beginning after 2017—even under the simplified method. Pub. 587’s flowchart likewise routes employee use to no deduction. Emerald’s 2026 update calls the employee bar permanent and notes corporate reimbursement when the business is incorporated; for W-2-only clients, unreimbursed home-office expenses generally stay nondeductible on the personal return.

For the self-employed, a qualifying principal-place home office changes transportation. Pub. 587 tips that daily transportation between home and another work location in the same trade or business may be deductible (see Pub. 463). Emerald makes the same practice point: home-to-client trips can become business miles rather than commuting. Apply the IRS optional rates for the travel dates—see our standard mileage rates 2026 guide for the split-year Announcement 2026-11 / Notice 2026-10 periods—rather than inventing a rate on the organizer.

Checklist for US CPA firms

• Map the space. Floor sketch or photos of a separately identifiable exclusive area; record square footage for simplified or Form 8829 Part I.
• Prove exclusive + regular use. No personal use of the claimed square footage.
• Locate the admin work. Confirm no other fixed location for substantial billing, books or scheduling.
• Separate Augusta from home office. §280A(g) short rentals are a different statute and file.
• Pick simplified vs Form 8829 deliberately. Compare $5 × sq ft (≤300) to allocated actuals; remember no simplified carryforward and the irrevocable yearly election.
• Employees and corps. Do not put unreimbursed employee home-office costs on Schedule A; for incorporated owners, evaluate accountable-plan reimbursement.
• Mileage follow-through. If the home is the principal place of business, update logs for home-to-client travel and apply the correct 2026 optional rate period.

Where Tax Brew fits

Home-office files need square-footage support, admin-location notes and a clear simplified-vs-8829 memo before your team signs Schedule C. Tax Brew provides bookkeeping, cleanup and tax prep support for US CPA firms—including a first 20 hours free for qualifying engagements—while your team keeps the advice, representation and sign-off. See our services, or email info@taxbrewglobal.com.

Sources: Valerie McLaughlin, Emerald Tax & Accounting — Home Office Deduction Update for 2026 (Oct. 1, 2026); 26 U.S.C. §280A (Cornell LII); IRS Publication 587 (2025); IRS Topic no. 509; IRS — Simplified option for home office deduction; Revenue Procedure 2013-13. General information, not tax or legal advice.