Home Office Deduction Calculator
Working from home? The IRS offers two methods to calculate your home office deduction. Use this calculator to see which method saves you more — and understand your audit risk.
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Average Deduction
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Home Office Deduction Calculator
Compare Simplified vs Actual Expense methods
Home Information
Used for depreciation calculation in actual expense method
Land isn't depreciable. Typically 15-25% for most homes.
Office Space
Qualification Requirements
Business & Home Expenses
Your total self-employment income before expenses
Business expenses besides home office (supplies, software, etc.)
Simplified
$750
Actual
$3,356
Business %
7.5%
Disclaimer: This calculator provides estimates for educational purposes only. Actual deductions depend on your specific circumstances and proper documentation. The home office deduction has specific IRS requirements. Consult with a qualified CPA for personalized advice.
Understanding the Home Office Deduction
If you're self-employed and use part of your home exclusively and regularly for business, you may be able to deduct expenses related to that space. The IRS provides two methods to calculate this deduction.
Method 1: Simplified Method ($5/sq ft)
The simplified method allows you to deduct $5 per square foot of your home office, up to a maximum of 300 square feet (total maximum deduction: $1,500). This method:
- Requires minimal recordkeeping
- No depreciation calculations or recapture
- Cannot carry forward unused deductions
- Best for smaller offices or those who prefer simplicity
Method 2: Actual Expense Method (Form 8829)
The actual expense method calculates your deduction based on the business percentage of your home expenses:
- Mortgage interest or rent
- Property taxes
- Utilities (electric, gas, internet)
- Insurance
- Repairs and maintenance
- Depreciation (for owned homes)
This method often yields a larger deduction but requires more documentation and has depreciation recapture implications when you sell your home.
The “Exclusive and Regular Use” Test
To qualify for either method, your home office must be used:
- Exclusively — The space is used only for business. A desk in your living room doesn't qualify.
- Regularly — You use the space consistently for business, not just occasionally.
- Principal place of business — Or where you meet clients/customers, or a separate structure.
Frequently Asked Questions
Who can claim the home office deduction?
Self-employed individuals who use part of their home exclusively and regularly for business can claim this deduction. W-2 employees generally cannot claim it (the deduction was suspended for employees from 2018-2025 under the TCJA). The space must be your principal place of business, or where you meet clients/customers.
What is the simplified method?
The simplified method allows you to deduct $5 per square foot of your home office, up to 300 square feet (maximum $1,500 deduction). You don't need to track actual expenses or calculate depreciation. It's simpler but may result in a smaller deduction than the actual expense method.
When is the actual expense method better?
The actual expense method is typically better when you have high home expenses (mortgage interest, property taxes, utilities) or a larger office relative to your home size. It requires more recordkeeping but often results in a larger deduction. Our calculator compares both methods to show you which saves more.
What is the "regular and exclusive use" test?
To qualify, your home office must be used (1) regularly for business — not occasionally, and (2) exclusively for business — you can't use the space for personal activities. A desk in your living room doesn't qualify. A dedicated room with a door is ideal for audit defense.
What is depreciation recapture?
If you own your home and use the actual expense method, you must depreciate the business portion over 39 years. When you sell the home, any depreciation you claimed (or should have claimed) is "recaptured" and taxed at up to 25%. This can reduce the net benefit of the actual expense method.
Can my deduction exceed my business income?
No. The home office deduction is limited to your net business income after other deductions. If your deduction exceeds this limit, the excess carries forward to future years. The simplified method avoids this complexity since the maximum is only $1,500.
Need help with your home office deduction?
The calculator gives you an estimate — but proper documentation and correct filing are essential to avoid IRS issues. Book a free consultation to ensure you're maximizing your deduction safely.
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