Quick Answer
Yes, you can deduct both home office and co-working space expenses if you use your home office regularly for business. In 2026, freelancers can deduct up to $1,500 annually using the simplified method for home offices plus actual co-working membership costs.
Best Answer
Priya Sharma, Small Business Tax Analyst
Best for freelancers who work from home regularly and use co-working spaces occasionally
Can you claim both home office and co-working deductions?
Yes, you can absolutely deduct both home office expenses and co-working space costs — as long as your home office meets the IRS requirements for regular and exclusive business use. According to IRS Publication 587, having additional work locations doesn't disqualify your home office deduction.
The key requirement is that your home office must be your "principal place of business" or used regularly for administrative activities. If you use a co-working space for client meetings or change of scenery but do your main work at home, you qualify for both deductions.
Example: Full-time consultant with mixed workspace usage
Sarah runs a marketing consultancy from her home office and pays $200/month for a co-working space membership. Here's how she can deduct both:
Home office deduction (simplified method):
Co-working space deduction:
Total workspace deductions: $750 + $3,240 = $3,990/year
How to maximize both deductions
For your home office:
For co-working expenses:
Key factors that affect this strategy
What you should do
Start tracking your workspace usage immediately. Document which days you work from home vs. co-working spaces, and keep all receipts for co-working expenses. Use our deduction finder to identify other workspace-related expenses you might be missing, like equipment that moves between locations.
Key takeaway: You can claim both deductions if your home office meets IRS requirements — potentially saving $1,000-2,000+ annually in taxes for freelancers using both spaces regularly.
*Sources: [IRS Publication 587](https://www.irs.gov/pub/irs-pdf/p587.pdf), IRS Revenue Ruling 94-24*
Key Takeaway: Full-time freelancers can deduct both home office and co-working expenses, potentially saving $1,000-2,000+ annually if the home office meets exclusive and regular use requirements.
Comparison of home office deduction methods when also using co-working spaces
| Method | Maximum Annual Deduction | Best For | Documentation Required |
|---|---|---|---|
| Simplified Method | $1,500 (300 sq ft max) | Small home offices, simple record keeping | Square footage measurement, usage log |
| Actual Expense Method | No limit (based on actual costs) | Large home offices, significant equipment | All home expenses, detailed allocation records |
| Co-working Expenses | Unlimited (100% of business use) | All freelancers using external spaces | Receipts, business purpose documentation |
More Perspectives
James Okafor, Self-Employment Tax Specialist
Best for people with day jobs who freelance from home and occasionally use co-working spaces
Special considerations for side hustlers
As a side hustler with W-2 income, you can still claim both deductions, but your situation is trickier. According to IRS guidance, your home office deduction is limited to your 1099 income — you can't use it to offset your W-2 wages.
Example: Side hustler scenario
Mike works full-time but earns $8,000 annually from freelance web design. He uses a spare bedroom exclusively for freelance work and pays $150/month for co-working access:
Home office deduction:
Co-working deduction:
Total deductions: $1,500 against $8,000 freelance income
The key difference: if your total business deductions exceed your 1099 income, you can't claim the excess against your W-2 wages. Any unused deductions can carry forward to next year.
What to track as a side hustler
Key takeaway: Side hustlers can claim both deductions but are limited by their 1099 income — track usage carefully to maximize the benefit within this constraint.
Key Takeaway: Side hustlers can claim both deductions but total business deductions cannot exceed 1099 income, making careful expense tracking essential for maximizing benefits.
Priya Sharma, Small Business Tax Analyst
Best for YouTubers, podcasters, and online creators who need different spaces for different types of content
Content creators and multiple workspace needs
Content creators often have unique workspace requirements that make both home office and co-working deductions valuable. You might edit videos at home but need professional lighting or quiet spaces for recording, or use co-working spaces for collaborations and networking.
Example: YouTube creator with diverse needs
Alex creates educational content and earns $45,000 annually. She uses her home office for editing and administrative work, plus rents co-working space for professional recordings:
Home office setup:
Co-working and studio rentals:
Content creator considerations
Maximizing deductions as a creator
Document the business purpose of each workspace. Home office for editing and admin work establishes your principal place of business. Co-working spaces for professional recording, collaboration, or networking show legitimate business reasons for additional workspace costs.
Key takeaway: Content creators can often justify higher co-working expenses due to collaboration needs and professional image requirements, potentially deducting $3,000-5,000+ in combined workspace costs.
Key Takeaway: Content creators can justify substantial co-working expenses for professional recording and collaboration needs, often deducting $3,000-5,000+ in combined workspace costs.
Sources
- IRS Publication 587 — Business Use of Your Home
- IRS Revenue Ruling 94-24 — Multiple business locations and home office deduction
Reviewed by Priya Sharma, Small Business Tax Analyst on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.