Diane Kennedy, CPA
Telehealth therapists can often claim a home office deduction if their space meets IRS rules. Even if you rent another office, both may qualify. The key is regular and exclusive use of your home workspace.
If you’re a therapist working from home, especially doing telehealth, you’ve probably wondered: Can I take a home office deduction, even if I also rent space somewhere else?
The answer is yes.
And it all comes down to how you use the space in your home.
The rule that matters most: “regular and exclusive use”.
To qualify for a home office deduction, your space must be used regularly and exclusively for your business.
“Regularly” means it’s part of your ongoing routine. It’s not something you just use occasionally.
“Exclusively” is where the rules aren’t always intuitive. It means that specific area is used only for your practice, not personal or shared.
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Take QuizWhat “Exclusive” Really Looks Like
This doesn’t mean you need a perfectly staged office.
It can be:
- A spare bedroom used only for telehealth sessions and admin work
- A defined area set up specifically for your practice
- Even a converted closet with a desk and shelving, as long as it’s used only for business
But there are limits. Working from your kitchen table, scooting dishes to the side, won’t work. Neither will the same space used for a family area and your home office.
The IRS is looking for a space that is clearly set aside for your business.
How To Calculate Your Home Office Deduction
Once your space qualifies, the calculation is fairly straightforward.
Start with square footage:
- Measure your office space
- Measure your total home square footage
- Divide the office space by the total to determine your business percentage
For example:
- Office = 150 sq ft
- Home = 1,500 sq ft
- Business use = 10%
You would generally apply that 10% to your overall home-related expenses.
What Expenses Can Be Included
If you qualify, you can allocate a portion of:
- Rent or mortgage interest and property taxes
- Utilities
- Insurance
- Housekeeping
- Landscaping
- General repairs and maintenance
In addition, any expenses directly for the office space are typically fully deductible. That could include essentials for the place you actually work like a desk, chair and lamp. It could be extra storage and shelving you’ve put in your work space. And it might also mean a nice rug, some pictures on the wall and a plant.
Yes, Renters Can Take A Home Office Deduction
You don’t need to own your home.
If you rent, your rent payments are included, subject to the same calculation, along with your other home expenses.
What About Having A Second Office?
This situation is more common than you might expect.
For example, what if you see telehealth patients from home plus handle notes, billing and record-keeping from your home office. Meanwhile, you also rent a separate space for in-person sessions.
In that case, both can be valid business expenses:
- Your home office qualifies based on how it’s used
- Your rented office is a separate, fully deductible expense
They serve different purposes, and both can be part of your practice.
Where This Gets Confusing
The most common misunderstanding I see is the assumption: “If I have another office, I can’t take a home office deduction.”
That’s not the rule.
The real question is whether your home space meets the regular and exclusive use standard.
A Practical Next Step
If you’re not sure whether you qualify, look at the space you’re using. Is it truly dedicated to your practice?
If so, measure it for business square footage and compare that to your total square footage. Now imagine getting a deduction for all your home-related expenses, based on that business percentage.
Is it worth it?
Telehealth Home Office Deduction: Frequently Asked Question (FAQs)
Can I take a home office deduction if I rent my home?
Yes. Rent is included as part of your home office calculation.
Does my home office have to be a separate room?
No, but it must be a clearly defined space used exclusively for your business.
Can I take both a home office deduction and deduct office rent?
Yes, if both spaces are used for legitimate business purposes.
What if I only use the space part-time?
It must be used regularly and exclusively for business, even if not full-time.
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This article is part of the Tax Strategy Series, featuring in-depth, practical guidance from Diane Kennedy, CPA—bestselling author, strategic tax consultant, and founder of USTaxAid and KennedyTax.tax. Explore the full series and catch every installment here.