Is a coworking space deductible? And can you claim both?

Coworking membership is an ordinary business expense and fully deductible. It goes on Schedule C line 20, rent or lease.

That is the easy part. The interesting questions are whether you can also claim a home office, and what each choice does to your mileage — which is often worth more than the deduction itself.

What counts

Deductible in full:

• Monthly or annual membership fees
• Dedicated desk or private office rental
• Meeting room bookings
• Day passes
• Printing, lockers, mail handling and similar add-ons

Not deductible: the coffee you buy there for yourself, and any part of the membership covering personal use — if your plan includes gym access or social events with no business purpose, strictly only the business share qualifies. In practice most memberships are wholly business and treated as such.

Can you claim a coworking space and a home office?

Yes — and this surprises people, because the home office rules talk about your “principal place of business”, which sounds exclusive.

It is not. You can deduct both if each genuinely qualifies. The realistic scenarios:

You use coworking a few days a week and work from home the rest. Both are business expenses. The home office still needs to pass its own tests — regular and exclusive use, and being your principal place of business or a place you regularly meet clients.

Coworking is where you do the work; home is where you do the admin. This is the common case, and it still qualifies. The home office rules explicitly allow a space used for the administrative and management side of the business — scheduling, invoicing, bookkeeping — where you have no other fixed location for that.

The word “principal” is about where the business is centred, not about having only one place.

Where it fails: if the coworking space is unambiguously your main workplace and you also do admin there, a home office claim is weak. You need a genuine reason the home space exists.

The part that is worth more than the deduction

Establishing a qualifying home office changes what counts as a business mile, and for anyone who drives this is frequently the larger benefit.

Driving from home to a regular workplace is commuting, and commuting is never deductible. Without a qualifying home office, your trips to the coworking space are commuting — worth nothing.

With a qualifying home office as your principal place of business, travel between one business location and another is business travel. Trips to the coworking space, to clients, to suppliers all become deductible from the moment you leave the door.

At 2026 rates — 72.5¢ per mile before 1 July and 76¢ after — a 12-mile round trip three times a week is roughly 1,800 miles a year, worth around $1,300 of deduction. That can exceed the home office deduction itself.

Which is why the answer to “should I bother claiming a small home office?” is usually yes, even when the space is modest.

Coworking versus home office, purely on cost

If you are choosing rather than combining:

Coworking is simpler. One invoice, one line, no square footage, no exclusive-use test, no depreciation, nothing to recapture if you own your home. Fully deductible with no profit limitation.

A home office is free in cash terms but has conditions. The simplified method caps at $1,500 ($5 per square foot, 300 square feet maximum). The actual-expense method often doubles that for a renter in a city, but requires percentages and records — and it cannot create a loss, though under the actual method the excess carries forward.

For most people the honest comparison is not financial. Coworking costs real money and saves you roughly a third of it in tax; a home office costs nothing and gives you a smaller deduction. The deduction should not be what decides where you work.

Short-term and occasional use

Day passes while travelling are deductible as a business expense. If the trip itself is deductible business travel, so is the workspace.

A café is not deductible. Buying coffee to justify sitting somewhere does not create a workspace expense — that is a personal meal, and meals eaten alone while working locally are not deductible.

Records to keep

Straightforward for coworking: the invoices, which are usually emailed monthly and easy to retrieve later.

If you are also claiming a home office, keep the measurements and the housing costs, and write a short note explaining the split — which activities happen where. That note is the whole justification for claiming both, and it is much easier to write now than to reconstruct in two years.

Because workspace costs reduce net profit, they save income tax and self-employment tax — roughly 36% combined at a 22% marginal rate. The calculator below shows what your profit costs once they are deducted.