The Spare Room
MONEY MEETS TAX · EPISODE 25
Irvine · October 2026
Money & Tax in this episode
A growing design project · A dedicated workspace · When a home office actually qualifies
The dining table had stopped being a dining table.
There were two fabric books near Evan’s chair, a tile sample beside the fruit bowl, and three paint cards under Daisy’s laptop.
Evan picked up one of the paint cards.
“Is this white?”
Daisy looked over.
“Yes.”
He picked up the one underneath it.
“And this?”
“Also white.”
“They’re different?”
Daisy took both from him.
“Very.”
Evan nodded.
“Of course.”
Jiwoo slapped both hands against the edge of her high chair.
Daisy moved the samples farther away.
“That’s the problem.”
“The whites?”
“The table.”
Her latest project was still small.
One room. Furniture, lighting, paint, a few built-ins.
The referral had come from the project she had almost turned down a few weeks earlier.
Then another person had asked if she was taking new clients.
Daisy had not answered that one yet.
She closed her laptop.
“I need somewhere to work.”
“You have somewhere to work.”
Daisy looked at the table.
Evan followed her eyes.
“Okay.”
The small spare room had mostly avoided having a purpose since they moved in.
Two unopened boxes were still against one wall.
A folding mattress stood behind the door.
Their suitcases were in the closet.
Daisy had once called it temporary storage.
Five months later, it was still temporary storage.
She opened the door.
“I could put a desk here.”
Evan stood behind her.
“You’d lose the guest room.”
“We don’t have a guest room.”
He pointed at the folding mattress.
“We have evidence of one.”
“We have a mattress standing vertically.”
“That’s a very efficient guest room.”
Daisy smiled.
Then she stepped into the room and looked around properly.
The window was better than she remembered.
Afternoon light.
Enough wall space for samples.
A closet she could use for fabric books, drawings, and the things currently spreading through the rest of the condo.
She walked to the wall and held out her hands.
“Desk here.”
Evan leaned against the doorframe.
“Shelves?”
“Here.”
“Printer?”
“In the closet.”
“You’ve thought about this.”
“For about twelve minutes.”
Daisy looked at the folding mattress.
“That has to go.”
“Where?”
“Your spreadsheet can solve that.”
“That’s not really what spreadsheets do.”
“Then today you grow.”
By dinner, Daisy had measured the room twice.
She had also moved one box into the hall and opened the other.
Most of it was kitchen stuff they had forgotten they owned.
Evan was sitting on the floor sorting cables when he said it.
“This might actually count as a home office.”
Daisy looked up.
“I already work from home.”
“That’s not the same thing.”
She waited.
Evan had his phone out now.
“There’s an exclusive-use rule.”
Daisy looked around the room.
“Meaning?”
“If this is your office, it has to actually be your office.”
“It would be.”
Evan pointed at the folding mattress.
Daisy looked at it.
“No guests?”
“That’s what I’m trying to figure out.”
“For the deduction?”
“Yeah.”
Daisy thought for a second.
“What if someone sleeps here once?”
“I think that’s the problem.”
“The tax problem.”
“Yes.”
“Not the guest problem.”
“That depends who’s visiting.”
Daisy laughed.
Evan kept reading.
The rule was more specific than he expected.
Working at home was not enough.
A space generally had to be used regularly and exclusively for business.
And there were additional rules about what kind of business use qualified.
Daisy sat down on one of the unopened boxes.
“So if I answer emails from the couch, no deduction.”
“Not for the couch.”
“What about this room?”
“Maybe.”
“Good answer.”
“I’m still reading.”
“That was the joke.”
Evan looked up.
Daisy smiled.
He went back to the page.
“There’s one question before the room.”
“What?”
“Whether the design work itself is a business yet.”
Daisy looked at him.
“You’re telling me the room has prerequisites?”
“Tax ones.”
She nodded toward his phone.
“Keep going.”
“If the design work is a business, and this is where you do the administrative work, it can potentially count as your principal place of business if you don’t have another fixed place where you do that work.”
Daisy nodded.
“Emails. Proposals. Ordering. Drawings.”
“Bookkeeping.”
“I was hoping you’d do that.”
“That doesn’t change where it happens.”
“And client calls.”
“Probably.”
Daisy looked around again.
“So the room has to be only for work.”
“Generally.”
“What if the closet has suitcases?”
Evan paused.
“I don’t know.”
He kept reading.
“The rule can apply to part of a room. It doesn’t necessarily have to be the whole room.”
Daisy stood up again.
“So I could use this side for work.”
“Possibly, if that area is actually used only for the business.”
“And the mattress stays over there?”
Evan looked from the desk wall to the mattress.
“That feels like we’re designing around the tax rule.”
“Exactly.”
Daisy folded her arms.
“I don’t want half an office.”
Evan put the phone down.
For months, the project had fit wherever there was space.
The dining table.
The couch.
Sometimes the kitchen counter while Jiwoo slept.
It had worked because the work was temporary.
Except it had stopped feeling temporary.
Daisy walked over to the window.
“I don’t need a tax deduction to want this.”
“I know.”
“I need somewhere I can leave things out.”
“Without Jiwoo eating the paint samples.”
“She has strong opinions about Benjamin Moore.”
“She has strong opinions about paper.”
Daisy smiled.
Then she looked at the empty wall again.
“And if another project comes in, I don’t want to clear the dining table every night.”
Evan nodded.
Then he picked up the folding mattress.
“So this goes?”
Daisy looked at him.
“You’re giving up very quickly.”
“I’m optimizing.”
“For what?”
“Exclusive use.”
Daisy laughed.
“Put it in the closet for now.”
“The closet you wanted for samples?”
She looked at the mattress.
Then at the closet.
Then back at Evan.
“No.”
They carried it out together.
The next morning, Daisy ordered a desk.
Not an expensive one.
Simple oak.
Wide enough for her laptop and drawings.
She did not order the shelves yet.
“I want to see the desk first.”
Evan was making coffee.
“I thought you already knew what you wanted.”
“I design things for a living.”
“Exactly.”
“That means I know what happens when you buy everything before measuring.”
Evan handed her a mug.
On his laptop, the home-office page was still open from the night before.
Daisy noticed.
“How much is the deduction?”
“I haven’t calculated it.”
“I know there are two methods.”
“That sounds less promising.”
“Simplified and actual expenses.”
“Which one is better?”
“Depends.”
“There you are.”
Evan smiled.
“The simplified method is easier. The actual method can include a share of certain home expenses, but there’s more tracking.”
“And depreciation?”
“With the actual method, potentially.”
Daisy took a sip of coffee.
“So more deduction, more records, more things to remember later.”
“Potentially.”
She nodded.
“We can figure that part out when we do the return.”
Evan looked at her.
Daisy looked back.
“What?”
“That’s usually my line.”
“No. Your line is usually, ‘We should figure this out before the return.’”
“Fair.”
Daisy walked toward the spare room.
At the doorway, she stopped.
“Actually, one thing.”
“What?”
“If we’re going to claim it as an office, let’s make sure it really is one.”
Evan nodded.
“No luggage.”
“No guest mattress.”
“No random boxes.”
“What about your samples?”
Daisy looked offended.
“Those are the reason the room exists.”
Three days later, the desk arrived.
Evan assembled it after dinner.
Daisy stood behind him with the instructions.
“You skipped a step.”
“I did not.”
She pointed.
Evan looked.
Then went back one page.
Daisy said nothing.
“That was generous.”
“I’m working on being supportive.”
When the desk was finished, Daisy put her laptop in the middle.
One fabric book on the left.
A small lamp on the right.
Nothing else.
She sat down.
Evan stood in the doorway.
“Well?”
Daisy looked around.
“It needs shelves.”
“Obviously.”
She smiled.
Then opened the proposal she had been trying to finish at the dining table all week.
Evan turned to leave.
“Hey.”
He looked back.
Daisy pointed at the doorway.
“Close it?”
Evan closed the door.
The Tax Behind the Story
Working from home does not automatically create a home-office deduction. For a self-employed person, the activity must first qualify as a trade or business, and the space generally must be used regularly and exclusively for that business. The space must also satisfy one of the qualifying business-use tests. A home office can qualify as a principal place of business when it is used for administrative or management activities and there is no other fixed location where the taxpayer conducts substantial administrative or management activities.
The qualifying area does not have to be an entire room, but the business portion generally cannot also be used for personal purposes. Once the space qualifies, a taxpayer may generally choose between the simplified method and the actual-expense method. The simplified method currently uses $5 per square foot, up to 300 square feet. The actual method allocates eligible home expenses and may include depreciation.
The deduction can change the after-tax cost of working from home. It does not decide whether the work has grown enough to deserve its own space.
Want the tax rules behind the story?
Home Office Deduction: When Does Your Workspace Actually Qualify?
Working from home and having a deductible home office are not the same thing. This guide explains when an activity must first qualify as a business, the exclusive-use and regular-use requirements, principal-place-of-business rules, simplified versus actual methods, and what changes when a workspace also has a personal use.