Renting a room in your own home to your business belongs on Line 30, line 30, business use of your home.
Why line 30
A sole proprietor cannot rent space to themselves. You and the business are the same taxpayer, so a payment from the business account to your personal account for the spare room is a transfer, not rent: it produces no line 20b deduction and no rental income. The route for that space is the business use of home deduction on line 30, computed on Form 8829 or with the simplified method, and it needs regular and exclusive business use of the area. A corporation or a partnership renting from an owner is a different arrangement with its own rules.
Log it once, with the line already on it. Type an expense in plain words in ClaryBook and it is filed with a date, vendor, amount and what it was for, so the number your preparer needs for renting a room in your own home to your business is already written down.
Start for freeWhat renting a room in your own home to your business is confused with
- Line 20b, rent or lease of other business property
- 20b is rent paid to a landlord who is a different taxpayer, so a leased outside office is 20b while a payment to yourself for your own spare room is not an expense at all.
- Schedule E, schedule e, rental real estate
- Rent from a genuine third party tenant in your home is reported on Schedule E, which is not what a transfer from your own business is.
- not deductible, not deductible
- If the room fails the regular and exclusive use test there is no line 30 deduction either, and the cost stays personal.
Examples that belong on line 30
- $0 deducted for a $500 a month transfer from the business account, with the space claimed on line 30 instead
- A 120 square foot spare bedroom used only for the business, claimed on Form 8829 against a 1,500 square foot home
- A 150 square foot office claimed under the simplified method at the set rate per square foot
- A dining table used for work in the evenings, which fails the exclusive use test and gets nothing
What does not belong here
- A rent expense on line 20b for a payment you made to yourself.
- Rental income on Schedule E for the same transfer.
- A home office claim for a room that is also used personally.
- The whole mortgage payment, where only the business share of qualifying costs reaches Form 8829.
The limit that applies
The simplified method gives a set amount per square foot of qualifying business space up to a capped area, while Form 8829 allocates actual home costs by business percentage. Both require regular and exclusive business use.
What to keep
Keep the measurements of the room and of the home, photographs of the space as it is used, and the household bills behind the Form 8829 calculation. The simplified method still needs the square footage and the regular and exclusive use facts.
Other expenses on line 30
| Expense | Line |
|---|---|
| a home's electricity bill with a home office | Line 30 |
| home costs for a home office | Line 30 |
| home mortgage interest where you have a home office | Line 30 |
| homeowner's or renter's insurance with a home office | Line 30 |
| the simplified home office method | Line 30 |
| working from home | Line 30 |
Related lookups
- Where does office rent go on Schedule C?
- Do rental property expenses go on Schedule C?
- Is a car payment deductible on Schedule C?
Sources
- Instructions for Schedule C (Form 1040)
- Publication 587, Business Use of Your Home
- About Form 8829, Expenses for Business Use of Your Home
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Log it once, with the line already on it. Type an expense in plain words in ClaryBook and it is filed with a date, vendor, amount and what it was for, so the number your preparer needs for renting a room in your own home to your business is already written down.
Start for free