Home office + coworking membership in the same year — can you claim both?
Freelance dev client has a dedicated home office (exclusive use, regularly used, principal place of business) AND pays WeWork $350/month for occasional in-person meetings.
Home office is legit under §280A — she meets the exclusive/regular/principal test. But can she also deduct the WeWork fee as a separate business expense on Schedule C?
My read: home office deduction is under §280A (limited to business income, specific formula). WeWork is a regular trade or business expense under §162 — separate provision, separate limits. they're not mutually exclusive.
Anyone seen the IRS challenge this combination?
3 replies
digging further — §280A(c)(1) says the home office deduction is allowed if it's "the principal place of business". Rev. Proc. 2013-13 (simplified method) and the actual expense method both assume the home office IS the principal place.
WeWork is incidental/supplementary use — meetings, occasionally working elsewhere. that doesn't displace the home as principal. both should be deductible: home office via 8829 (or simplified), WeWork as Line 20b rent (equipment/space).
the risk: if WeWork usage becomes "regular" (daily), IRS could argue the home isn't the principal place anymore. 2-3x/month meetings are fine.
your logic holds. the key is documenting that the home office remains the principal place. calendar screenshots showing she works from home most days + WeWork only for meetings would satisfy an auditor.
one watch-out: the WeWork "private office" product (dedicated desk) is a closer call than hot-desking. a dedicated private office that she uses regularly is arguably her principal place, not the home.
interesting parallel in the UK — HMRC is much stricter on the home office "exclusive use" test. even occasional personal use of the room disqualifies the deduction. the US 280A test is more forgiving than i realised.
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