📚 Table of Contents
1. What is Home Office Depreciation?
Depreciation is a tax deduction that allows you to recover the cost of business assets over their useful life. For home office workers, this includes computers, furniture, equipment, and even home improvements used for business purposes.
Types of Depreciable Assets for Home Office:
- Office Equipment: Computers, monitors, printers, scanners
- Furniture: Desks, chairs, bookcases, filing cabinets
- Technology: Software, routers, phones, tablets
- Improvements: Built-in shelves, electrical upgrades, home office construction
- Vehicles: Business use portion of car for work-related travel
2. USA: IRS Depreciation Rules 2026
The IRS offers several methods for depreciating home office assets. Understanding these can significantly impact your tax savings.
MACRS Depreciation System
The Modified Accelerated Cost Recovery System (MACRS) is the standard depreciation method for most business assets in the USA.
| Asset Type | Useful Life | MACRS Class | 2026 Depreciation Rate |
|---|---|---|---|
| Computers & Software | 5 years | 5-Year Property | 20% (first year) |
| Office Furniture | 7 years | 7-Year Property | 14.29% (first year) |
| Office Equipment | 5 years | 5-Year Property | 20% (first year) |
| Home Improvements | 39 years | Nonresidential Real Property | 2.564% (annual) |
| Vehicles (business use) | 5 years | 5-Year Property | 20% (first year) |
Section 179 Deduction for 2026
Bonus Depreciation 2026
Bonus depreciation phases down for 2026:
- 2024: 80% bonus depreciation
- 2025: 60% bonus depreciation
- 2026: 40% bonus depreciation
- 2027: 20% bonus depreciation
- 2028+: No bonus depreciation
IRS Form 4562
You must file Form 4562 (Depreciation and Amortization) to claim depreciation deductions. Keep detailed records of:
- Purchase date and price
- Business use percentage
- Depreciation method used
- Accumulated depreciation
3. UK: Capital Allowances 2026
In the UK, depreciation is handled through capital allowances. The system changed significantly in April 2023 and these rules continue through 2026.
Annual Investment Allowance (AIA)
The AIA allows 100% deduction on most plant and machinery up to £1,000,000 annually.
Writing Down Allowances (WDAs)
| Asset Pool | Rate (2026) | Example Assets |
|---|---|---|
| Main Rate Pool | 18% per year | Computers, office furniture, equipment |
| Special Rate Pool | 6% per year | Integral features, long-life assets |
| Single Asset Pool | 18% or 6% | Cars, assets with partial business use |
Full Expensing for Companies
4. Germany: AfA Tables 2026
Germany uses official depreciation tables (AfA-Tabellen) with specified useful lives for different asset categories.
German Depreciation Rates 2026
| Asset Category | German Term | Useful Life | Annual Rate |
|---|---|---|---|
| Office Computers | Bürocomputer | 3 years | 33.33% |
| Office Furniture | Büromöbel | 13 years | 7.69% |
| Software | Standardsoftware | 3 years | 33.33% |
| Telephone Systems | Telefonanlagen | 8 years | 12.5% |
| Office Equipment | Bürogeräte | 8 years | 12.5% |
Degressive (Declining Balance) Depreciation
For movable assets, you can use degressive depreciation at up to 2.5 times the straight-line rate, but not more than 25% annually.
Country Comparison: Depreciation Rules 2026
USA Advantages
- Section 179: $1.2M immediate deduction
- 40% bonus depreciation in 2026
- Flexible MACRS methods
- Home office improvement deductions
UK Advantages
- AIA: £1M annual allowance
- Full expensing for companies
- Simple 18%/6% rates
- Super-deduction extended
Germany Advantages
- Clear AfA tables
- Degressive method option
- Low-value asset immediate write-off
- Precision in calculations
Depreciation Calculator 2026
Estimate Your Annual Depreciation
Common Depreciation Mistakes to Avoid
❌ Mistake #1: Not Separating Personal vs Business Use
Only the business use percentage of an asset can be depreciated. Mixed-use assets require precise tracking.
❌ Mistake #2: Missing Depreciation Deadlines
Assets must be placed in service before year-end to qualify for that year's depreciation.
❌ Mistake #3: Wrong Asset Classification
Computers (5-year) vs furniture (7-year) have different rates. Misclassification reduces deductions.
❌ Mistake #4: Forgetting Bonus Depreciation
Many taxpayers miss additional 40% bonus depreciation available in 2026 for qualifying assets.
❌ Mistake #5: Poor Record Keeping
Without purchase receipts, depreciation schedules, and use logs, deductions may be disallowed during audit.
📊 Need Help With Your Depreciation Schedule?
Download our free 2026 Depreciation Worksheet to track all your home office assets and maximize deductions.
Get Free Worksheet →Frequently Asked Questions
Q: Can I depreciate my home office space itself?
A: Yes, but only if you own your home. You can depreciate the portion of your home used exclusively for business based on the home office percentage. For example, if your home office is 10% of your home's square footage, you can depreciate 10% of your home's basis (excluding land).
Q: What happens when I sell a depreciated asset?
A: You may have to recapture depreciation as ordinary income when you sell. The difference between sale price and adjusted basis (original cost minus depreciation taken) is subject to depreciation recapture tax.
Q: Can I switch depreciation methods?
A: Generally, you must get IRS permission to change depreciation methods. Some exceptions exist for the first year or if using an incorrect method.
Q: What's the minimum amount for depreciation?
A: USA: Under $2,500 per item can be expensed immediately under de minimis safe harbor. UK: Assets under £2,000 can be pooled. Germany: Assets under €800 can be immediately expensed.
Q: How do I handle used equipment purchases?
A: Used equipment follows the same depreciation rules as new equipment. Your basis is the purchase price, and depreciation starts when you place it in service for your business.
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