Home office expense records are the proof behind a client's home office deduction: twelve months of rent or mortgage interest, utilities, insurance, repairs and internet bills, usually traced from bank statements, plus a note of the office's square footage, the home's total square footage and how the space is used for business.
Which home office expense records come from bank statements?
Bank statements supply most of the money side of home office records. Rent or mortgage payments, electricity, gas, water, home insurance, repairs and internet service all leave a household or business account each month, and each line shows the date, payee and amount the preparer needs to total the year.
The IRS page on the home office deduction lists mortgage interest, insurance, utilities, repairs and depreciation among the expenses the regular method can include. A statement line proves a payment happened, but it does not always prove the deductible part. A mortgage payment, for example, bundles principal, interest and often escrow, so the lender's year-end interest statement belongs in the file next to the bank lines.
When you pull these lines, keep them as a separate list rather than coding them straight into the business books. Most of a home's costs are personal. Only the business share ends up on the return, and the preparer works that share out from the full-year totals. Recording the full bills as business expenses overstates the books and forces a correction later.
Home office square footage and use details a preparer asks for
The square footage of the office and of the whole home are the two numbers every home office calculation starts from. Alongside them, the preparer needs to know how the space is used: whether it is used regularly and only for business, and whether it is the client's main place of business.
Those use questions come straight from the rules. The same IRS page says the client must regularly use part of the home exclusively for business and must show the home is the principal place of business, with room for clients who also work elsewhere but use the home substantially and regularly for business, such as meeting customers there. A bookkeeper cannot answer these for the client, but can make sure the answers are written down each year.
A short client note covers it: the room or area, its measurements, the total home size, the date the office was first used for business and one sentence on how it is used. A photo or a simple floor sketch helps if the preparer ever has to explain the claim. If the client moved during the year, the note needs two sets of figures and the move date.
Do home office expense records matter under the simplified method?
Expense records matter less under the simplified method, but they still matter. The IRS simplified option for the home office deduction allows $5 per square foot of business space, up to 300 square feet, without totalling actual home expenses. The square footage and use facts are still required.
The client often does not choose the method; the preparer does, sometimes by comparing both. That comparison is only possible if the actual expenses were kept. A client who stops tracking utilities because "we use the simple method" has given up the option of switching in a year when the regular method would come out ahead.
There is a second reason to keep the expense records. The exclusive and regular use test does not change under the simplified method. The records of how and when the space was used are the client's support either way.
A year-end home office records checklist for the client
A checklist sent in early winter turns home office records into a single request instead of a string of emails in March. Each item names the record, where it comes from and who supplies it, so the client knows which pieces the bookkeeper already has.
The table below is an example checklist. Adjust the rows to match the client's home and how the bills are paid.
| Record | Usual source | Who supplies it |
|---|---|---|
| Rent paid, twelve months | Bank statement lines or lease plus receipts | Bookkeeper pulls lines, client confirms |
| Mortgage interest and property tax | Lender's year-end statement | Client |
| Electricity, gas, water | Bank or card statement lines | Bookkeeper |
| Internet and phone | Bank or card statement lines, bills for mixed use | Bookkeeper, client notes the business share |
| Home insurance | Policy declaration page and payment lines | Client and bookkeeper |
| Repairs to the home or office | Invoices plus payment lines | Client |
| Office and home square footage | Measurement or floor plan | Client |
| How and when the space was used | Short written note | Client |
Put the request into the client's onboarding material so it is expected from the first year; the bookkeeping client welcome packet is the natural place for it. Send the reminder on the same schedule as other year-end requests, timed against the filing dates in tax deadlines for bookkeepers. Clients who also drive for work can gather the year's car records in the same sitting, using the approach in a mileage log for tax time.
Home office bills paid from a personal account
Many home office bills are paid from the owner's personal account, not the business account. That is normal for a sole proprietor working from home. It only means the records come from a second set of statements, which the client has to share or summarize for the year.
There are two common ways to handle it. The first is to collect the personal statements, or just the relevant lines, once a year and build the expense list from them. The second is to record nothing in the business books during the year and let the preparer apply the home office calculation to the totals the client provides. Either works, as long as the totals are traceable to a bill or a statement line.
What does not work is mixing the two halfway. If some months of utilities run through the business card and others through the personal account, list both sources so nothing is counted twice or left out.
When those personal statements arrive as PDFs, AutoBankConvert can convert them alongside the business statements, so the year's utility and rent lines are sorted and totalled in one place.