Home Office Receipts: What to Track and How to Prove It at Tax Time

The home office deduction is valuable, available to millions of remote workers and freelancers, and widely underused — mostly because people aren't sure what qualifies, what to track, or how to prove it.

The IRS is also notoriously skeptical of home office claims, which makes the documentation part more important than usual.

Here's what actually qualifies, what receipts you need, and how to track it properly.

The two tests you have to pass

Before tracking any receipts, make sure your home office actually qualifies. The IRS requires that your home office space pass two tests:

Regular use. You use the space for business on a regular basis — not occasionally, not sometimes when working from the kitchen table. A dedicated space you actually work in consistently.

Exclusive use. The space is used only for business. This is the one that trips people up. A room that's your office during the day but where guests sleep occasionally doesn't qualify. A desk in the corner of your bedroom where you sometimes work doesn't qualify. A dedicated room (or clearly defined space) that's never used for anything personal qualifies.

If your home office passes both tests, you can deduct a proportional share of:

• Rent (or mortgage interest, for homeowners)
• Utilities (electricity, gas, water)
• Internet service
• Renter's or homeowner's insurance
• Repairs and maintenance that apply to the whole home

The proportion is your office square footage divided by your total home square footage.

What receipts to keep

Rent or mortgage

Renters: Keep your lease agreement and monthly rent receipts or bank statements showing rent payments. If your landlord emails you a monthly confirmation, save those.

Homeowners: Your mortgage statement shows principal, interest, taxes, and insurance (PITI). You'll deduct the interest portion, not the full payment. Your mortgage servicer sends a Form 1098 annually that shows the total mortgage interest paid — keep this.

Utilities

Keep monthly utility bills or bank/credit card statements showing utility payments. You don't need to save every paper bill, but you need records showing what you paid each month:

• Electric bill
• Gas or heating oil
• Water (if applicable to your home office claim)

Utility bills are usually available as PDF downloads from your provider's website. Download them monthly or quarterly rather than trying to retrieve 12 months at year end.

Internet

Your internet service is partially deductible under the home office deduction and partially deductible as a business expense in its own right (business use percentage). Keep monthly statements or payment confirmations.

Repairs and maintenance

Home repairs that benefit only your office space are fully deductible. Repairs that benefit the whole home are deductible at the office-square-footage percentage.

• Only the office: New flooring in your office, painting the office walls, repairing the office window. Keep the contractor invoice or receipt.
• Whole home: New HVAC system, roof repair, painting the exterior. Keep the receipt and apply the office percentage.

Photograph every contractor receipt. Home repair receipts tend to be printed on regular paper and can last longer than thermal receipts, but digitizing them is still good practice.

The simplified method vs. the regular method

There are two ways to calculate the home office deduction:

Simplified method: $5 per square foot of your office, up to 300 square feet ($1,500 maximum). Easy to calculate. Requires no receipts beyond proof of the space's square footage.

Regular method: Actual expenses multiplied by your office percentage. More paperwork, potentially a larger deduction. Requires tracking all the receipts above.

Most people with a small office and modest home expenses benefit from the simplified method. If you have high rent or utilities in an expensive city, the regular method often produces a larger deduction.

Your accountant can calculate both and tell you which is better for your situation. If you use the regular method, you need all the receipts above.

How to track it throughout the year

Create a folder — physical or digital — labeled "Home Office [Year]." Put in it:

• Your lease or mortgage statement
• Monthly utility bills (or a statement at year end showing annual totals)
• Any repair receipts for the office or whole home
• A simple note with your home's total square footage and your office's square footage

For digital receipts, Receipt Converter can extract data from contractor invoices, utility bills, and any other document with vendor, date, and amount information. Not just store receipts — any document with that structure.

At tax time, you hand your accountant one folder with everything organized. They calculate the deduction for both methods, apply the higher one, and you're done.

What the IRS looks at in an audit

Home office deductions are audited more frequently than most expense categories. If you're audited, the IRS will typically ask for:

• Proof that the space is used regularly and exclusively for business (photos of the space help)
• Records showing the square footage of the office and the total home
• Receipts or statements for the expenses you claimed

Photos of your office space, taken at the beginning of the tax year, are a simple audit protection measure. They cost nothing and document that the space is set up for work — a desk, work equipment, business materials — and not for anything personal.

The home office receipts fit into your broader expense tracking system. For the full picture of what to track and how to organize it across the year, read how to organize receipts for taxes.

Start capturing your home office receipts properly. Try Receipt Converter free →