What qualifies?
- Office space rent
- Retail storefront rent
- Warehouse or storage unit rent
- Co-working space membership (WeWork, Regus, etc.)
- Studio or workshop rent
- Parking space rent for business vehicles
If the space is used exclusively for business, the full amount is deductible. No percentage calculation needed.
Home rent and the home office deduction
If you work from home, your personal rent isn't fully deductible. You'd use the home office deduction instead (see our home office deduction guide), which lets you deduct the business-use percentage of your rent.
Prepaid rent
Rent is deductible in the year it applies to, not the year you pay it. If you prepay 3 months of 2026 rent in December 2025, those 3 months are deductible in 2026, not 2025. The IRS is strict about this for cash-basis taxpayers above certain thresholds.
IRS Reference
See IRS Publication 535 (Business Expenses), Chapter 3. Report on Schedule C, Line 20b (Rent - other business property).
See IRS Publication 535 (Business Expenses), Chapter 3. Report on Schedule C, Line 20b (Rent - other business property).
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