Identification

• You can deduct rent if you have a home office in your dwelling, according to the IRS. Only the portion of the space your home office occupies qualifies as a business expense. For instance, if you pay $1,000 in rent a month and your home office takes up 15 percent of your home, you can only deduct $150 in rent per month. The IRS allows you to use any reasonable method to measure the size of your home, such as measuring the size of the walls with a tape measure.
  
  

Requirements

• The most common reason that taxpayers with a home business cannot deduct rent is that they do not use their home office regularly and exclusively for work, according to TurboTax. You can use the office for incidental personal uses, such as taking an emergency call from a relative, but the IRS probably would negate the deduction if you use your home office for family time every week. If you only use the office once or twice a year, it probably does not qualify for a deduction, but using the space every week or every other week probably counts as regular use.
  
  

Exception

• The IRS allows an exception to the regular use requirement for certain businesses. You can use a home office for personal reasons if you run a home daycare business, but you deduct rent based on the portion of the home used for business hours. You can also deduct rent when you have a home business -- your home must be the only location of the business -- and use a basement, for example, to store inventory or records.
  
  

Tip

• Employees can have a home office too, but only if the employer requires it. If you can take the home office deduction, you can claim monthly expenses, such as utilities and repairs, in addition to rent. Consult a tax professional if you are not completely sure that you can deduct rent as a business expense. Overstated deductions like the home office exclusion are part of the $30 billion the IRS loses each to erroneous deductions, according to the IRS. If you already own your home, you can depreciate the portion of your home you use for business.