By Robert P. Russo, CPA PC
Question: My CPA said that if I didn’t have any business income this year, I couldn’t take a home-office deduction. Is that true?
Answer: Absolutely not. Even in a year with no income, claiming your home office deduction can provide valuable tax benefits.
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Why Your Business Loss Still Matters
If your business had no income, it might seem like deductions don’t matter—but that’s incorrect. Whether you:
- Started a business late in the year, or
- Had expenses exceeding income
You may have a tax loss that carries forward to future years. Under the 2025 tax law, these losses are called net operating losses (NOLs). Think of NOLs as a tax deduction savings account you can apply to future profitable years.
Bad Advice #1: Don’t File a Return
Skipping your tax return because you had no income is costly:
- Filing documents to your NOL carryforward, reducing future tax liability.
- Claiming all deductions, including home-office expenses, maximizes future savings.
Planning Tips for this year:
- Always claim your business deductions—even in a loss year.
- File your tax return to secure NOLs and carryover deductions.
Bad Advice #2: Skip the Home-Office Deduction
Your home-office deduction has two major benefits, even if you had it this year:
1. Convert Personal Miles to Business Miles
Without a home office, trips from home to clients or offices count as personal commuting—nondeductible.
Example:
- 22-mile round-trip to a client = personal miles
- 18-mile round-trip to a co-working office = personal miles
With a home office as your principal place of business, these trips become deductible business miles.
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2. Preserve Your Home-Office Deduction Carryover
Even if you don’t benefit this year, your home-office expenses carry forward under the 2025 law. Failing to claim the deduction now = no future-year benefit.
Tip: To qualify, report your home office as your principal place of business on your Schedule C.
Additional 2025 Tax Benefits
- NOL Carryforward: Your business loss, including home-office expenses, may create a net operating loss that reduces taxes in future years.
- Mileage Deduction: Trips from home to clients or second offices are now business miles, increasing deductible expenses.
- Future Tax Savings: Deductions claimed during a loss year offset future business income.
Key Takeaways
Even without current-year business income, claiming your home-office deduction in 2025 ensures:
- Deduction carryover to offset future profits
- Business mileage instead of nondeductible commuting
- NOL generation to reduce future tax liability
Bottom line: Never skip your home-office deduction or fail to file your return just because your business had no income. Doing so may cost you thousands in future tax savings.
Need guidance? Contact us to maximize your home-office deduction, NOL carryforwards, and other business tax strategies.
MEET ROBERT P. RUSSO, CPA PC
As the founder and principal of Russo CPA, P.C, Bob pleasantly surprises clients (plus the IRS and lawyers) with his proactive, caring, and interested approach. Bob’s authentic passion for both numbers and people is why his accounting firm is sought after by everyone from solopreneurs to CFOs. And it’s what energizes his fast-growing team of top CPAs who follow his lead by providing impeccable service to clients – without the CPA geek speak.
The only thing geeky about Bob is his favorite reading material: the latest tax regulations, codes, and rulings (so he can secure every possible tax advantage for his clients). You might mistake Bob for the charismatic entrepreneur and CFO behind an internet travel startup or a visionary real estate developer. That’s because he held those roles during his 30-year career as an accountant, which began at a high-profile accounting firm. While CPAs aren’t required to have “field” experience, the best ones do. But Bob doesn’t define success by his own achievements, it’s what he achieves for his clients. Because of his entrepreneurial past, Bob relates so well to his clients. In addition to serious tax savings most firms would miss, he empowers his clients with real-world accounting and financial insights to increase business.
Bob is even results-driven outside of work, whether it’s finishing the 2012 NYC Iron Man or volunteering for 12 years as President of a kids’ soccer league. While his bottom-line results are always impressive, what matters to Bob are the people who benefit from them.
When he’s not immersed in accounting, Bob is with his family, cooking up elaborate 18-course meals or globetrotting.
Robert P Russo CPA PC
Certified Public Accountants
231 W. 29th Street (bet 7th & 8th Ave)
Suite 500
New York, NY 10001
O: 212-279-9800
C: 917-207-9278
F:866-396-2310
www.robertprussocpa.com
