I want to start off by saying that I am not a licensed tax professional—this is not tax advice. This is simply some research I pulled for us to learn together about how working out of a coworking space can affect your taxes. 

Now that the legal disclaimer is over, let’s dive right in. In certain circumstances, coworking memberships are tax-deductible. If you’re a freelancer or 1099 employee, your membership is considered a business expense deduction. If you’re a W2 employee, your membership is not deductible. You can get your employer to pay/reimburse you; we even have a handy guide you can send to your employer.  

As an employer, if you purchase coworking memberships or day passes for you or your employees, you can deduct those costs from your taxes. It’s similar to renting traditional office space; it’s an expense that goes toward running your business, therefore it’s deductible. 

For both employers and independent contractors/freelancers to claim these write offs, all you have to do is fill out this Schedule C form. 

For freelancers, you can either claim your coworking membership or your home office–not both. There is one exception, though: if you use your home office for day-to-day business activities and use a coworking space for meeting with clients in conference rooms, then you may claim both. Just make sure you can show that both are used for their intended purpose if you’re ever audited.

Speaking of conference rooms, if you held any business meetings at a coworking space (even if you aren’t a member), the cost of the room can be deducted from your taxes as a business expense.

As far as parking and/or mileage cannot be a deducted expense, as they’re both considered commuting expenses. Luckily for members of The Root Coworking, our parking is free. Freelancers, however, can deduct mileage/parking costs if they visit a client at their space (if costs are incurred). 

Attending networking events can be deducted if your goal is to meet new clients or continue your education in your industry. Hosting networking events are also tax deductible, but there are lots of rules and regulations to this, so consult a professional on the details. For example, food and drinks are only 50% deductible, but a seminar is 100%.

These are the basics of what you might be eligible for this tax season as far as coworking is concerned. Make sure to reach out to your personal tax advisor to get squared away this April!