Workers who rent a traditional office can claim it as a business expense, and home-office users may qualify for a deduction. Coworking locations are no different, and a coworking tax deduction is available for remote workers and digital nomads.
While it’s important to consult a tax professional, in most cases your coworking membership fee is fully deductible as a business expense. Claim the deduction on your Schedule C, on line 20, “Rent,” just as you would claim the cost of a traditional workspace.
With all things related to taxes, the devil is in the details, so make special consideration if:
- Using a Home Office, Too: If you designate a portion of your home as a qualifying home office, consult with your accountant to determine how much, if any, overlap you can have between your home office and coworking membership
- Accruing Additional Business Expenses: In some cases, your monthly invoice for your coworking membership may also include line items for other services, such as additional conference room rental, copies or additional services. In most cases, these expenses are also deductible, but should be claimed as an office expense and not included as part of the rent deduction.
- Qualifying Business Expenses: Occasionally, other expenses may qualify as a deduction. For example, if you’re meeting with a client over lunch at Five Tables Café, you can claim 50 percent of its value if you discuss business under the 2018 tax code changes. Costs associated with your regular meals is your responsibility.
Of course, you’ll need to document your coworking membership expense as you would any other qualifying business expense. Maintain your invoices to corroborate your expenses should the IRS raise questions. As all tax situations are unique, make sure to consult with a credentialed tax professional to determine if coworking spaces are deductible for your situation.
See for yourself what a qualified coworking tax deduction looks like. Schedule a tour of desk chair™ workspace by calling 970.462.9464.