Home Office Deduction Calculator

You must use the space regularly and exclusively for business, and it must be your principal place of business or a spot where you regularly meet clients. Self-employed people who file Schedule C can claim it. W-2 employees generally cannot claim a federal home office deduction for unreimbursed employee expenses. Narrow statutory exceptions can apply, so confirm unusual situations with current IRS guidance.

Use whichever gives the larger deduction. This calculator runs both and recommends the bigger one. The simplified method is faster and needs no expense records, while the regular method usually wins when your office is a large share of your home or your annual home expenses are high.

You deduct $5 for every square foot of office space, up to 300 square feet, so the most you can claim is $1,500. It ignores your actual expenses entirely, which makes it quick but often smaller. You also cannot deduct home depreciation in the years you use it.

You find your business-use percentage by dividing office square footage by total home square footage, then apply that percentage to indirect expenses like rent or mortgage interest, utilities, insurance, repairs, and property tax. Expenses that benefit only the office, such as painting that one room, are 100% deductible. The regular method is reported on IRS Form 8829.

No. Under the gross income limitation, your home office deduction cannot exceed the net income from that business. If you enter your net business income, the calculator caps both methods at it. With the simplified method any disallowed amount is lost, while with the regular method the excess carries forward to a future year.

No. This tool gives a federal estimate using the $5 per square foot simplified rate and a straightforward Form 8829 calculation, and it assumes full-year business use. It does not handle partial-year changes, daycare facilities, or depreciation recapture. It is not financial or tax advice, so confirm your numbers with IRS Publication 587 or a tax professional.