We present a general theoretical framework to capture light-matter interactions beyond the electric-dipole approximation, applicable to extended nano- and microscale materials interacting with spatially structured electric fields without truncation at finite multipolar order. The approach is based on the Power-Zienau-Woolley (PZW) Hamiltonian for light-matter interactions and a representation of the material’s Hamiltonian in a basis of maximally localized Wannier functions (MLWFs), which can be obtained from first-principles electronic structure calculations. We utilize this novel approach to clarify the limitations of the ubiquitous dipole approximation. To that end, we consider electric fields generated by light with both uniform and non-uniform intensity profiles and a range of ratios of system size to the wavelength of light. Through this analysis, we identify the precise conditions under which the dipole approximation breaks down, leading to significant errors in the light-induced dynamics. Contrary to conventional belief, we find that the dipole approximation is remarkably robust for uniformly illuminated 1-D or 2-D materials if light propagates in the direction perpendicular to the material. For 3-D materials or non-perpendicular illumination of lower-dimensional materials, conventional wisdom holds, and the dipole approximation starts to break down when the wavelength of light becomes comparable to the system size. Furthermore, the dipole approximation fails to capture the light-matter interaction when the material is illuminated partially or non-uniformly. For slowly varying field intensities this failure can be corrected by the finite-order multipolar corrections. However, for fields that vary substantially over the spatial extent of the system size, correcting via finite order multipolar terms becomes computationally impractical. In contrast, our approach captures the beyond-dipole light-matter interactions at a computational cost of a standard dipole calculation. This efficiency paves the way for accurate first-principles simulations of spatially-structured light-matter dynamics in nanoscale devices, quantum materials, and interfaces.