I'd like to use my living space as a deduction, I don't pay rent.

  • 2
    Why don't you pay rent? Because somebody else is paying 100% of the bill (e.g. parents) or because you own the home? – user71659 Nov 5 '18 at 18:10
  • It is my parents home. My question was answered though, that there can be no deductions without expenses – Forrest Nov 5 '18 at 18:37

In general, tax deductions can only be used to offset specific expenses or income. If there is no expense, then you can't deduct it. Similarly, if you paid only $1 in rent, then you could deduct at most $1 for a room deduction. Note this also explains why if you donate your time to a charity, you cannot deduct that either (because there is no income to offset).

Note that tax credits work differently, as they reduce your tax bill, and can sometimes cause you to receive a tax refund even if you have no income. Credits are typically a special case and do not apply here.

  • 1
    And to be a bit more explicit, in you have a room in your house, for which you use for business, you can deduct part of the cost of maintain the house. (Certain conditions apply.) If your cost for maintaining the house is zero, well then you can't deduct anything. – Pete B. Nov 5 '18 at 18:08

In addition to TTT's excellent and accurate answer, you also can't deduct rent for your living space - even if you paid any - because living space isn't a business expense. You need your living space even if you weren't running a business, so it isn't a business cost.

There are some ways to make it work, primarily involving having part of your 'home' solely dedicated to work, but the tax office investigates them very thoroughly and they are very strict, because it's such an easy thing to fiddle.

  • Just to help the OP, this only applies if you are paying money for rent. In this case, it seems OP is paying $zero to the parents, so, there is no deduction possible. – Fattie Nov 6 '18 at 2:47

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