Home Office Deduction Calculator
Estimate your home office tax deduction and compare the simplified $5-per-square-foot method against the regular actual-expense method side by side.
Home Office Deduction Calculator
Who is filing?
Only self-employed filers can claim the home office deduction. Employees are excluded for tax years 2018 through 2025 under the Tax Cuts and Jobs Act.
Tax Year
The simplified rate is $5 per square foot and the $1,500 cap apply to all three years.
Home Office Square Footage
The area used regularly and exclusively for business.
Total Home Square Footage
Used to compute your business-use percentage for the regular method.
Net Business Income (Before Home Office)
Your Schedule C net profit before the home office deduction. This drives the gross-income limitation.
Annual Home Expenses (Regular Method)
Whole-home (indirect) costs. The calculator applies your business-use percentage to each one.
Show advanced (home depreciation)
Renters can leave this at $0. Depreciation applies only under the regular method.
Estimates only. The tax savings figure assumes a combined self-employed rate of 36% (22% income tax plus an effective self-employment tax component). Your actual rate depends on your bracket and total income. Download Tax47 for a full federal estimate.
See Your Full Tax Picture
This tool estimates one deduction. Tax47 builds your whole return from real W-2, 1099, and Schedule C data, applying every credit and deduction with a live refund estimate.
How the Home Office Deduction Works
The home office deduction lets self-employed taxpayers write off part of their housing costs as a business expense. It is available to sole proprietors, single-member LLC owners, partners, and other Schedule C filers who use part of their home for business.
To qualify, the space must pass the exclusive-and-regular-use test. Exclusive use means the area is used only for business, with no personal activity in that space. Regular use means you work there on a continuing basis. The office also has to be your principal place of business, or a space where you regularly meet clients or customers.
W-2 employees cannot claim the deduction for tax years 2018 through 2025. The Tax Cuts and Jobs Act suspended the unreimbursed employee business expense deduction, which included the home office write-off. Employees working from home should ask their employer about an accountable reimbursement plan instead.
Simplified Method vs. Regular Method
The simplified method is a safe harbor introduced under Rev. Proc. 2013-13. You multiply your office square footage (up to 300 square feet) by a prescribed rate of $5, for a maximum deduction of $1,500. There is no recordkeeping requirement, no depreciation, and no Form 8829: you report the deduction directly on Schedule C.
The regular method, reported on Form 8829, uses your actual home expenses. You figure your business-use percentage, then apply it to costs like rent or mortgage interest, utilities, insurance, repairs, and property tax. There is no fixed dollar cap, so a larger office or higher housing costs can produce a deduction well above $1,500. The trade-off is detailed recordkeeping and depreciation tracking.
As a rule of thumb, the regular method tends to win when your business-use percentage times your actual costs exceeds $1,500. The simplified method tends to win for smaller offices or modest expenses, and for filers who prefer to skip the paperwork. You can switch methods from one year to the next.
What Expenses You Can Deduct Under the Regular Method
The regular method splits costs into two types. Indirect expenses benefit the whole home and are deductible in proportion to your business-use percentage. Direct expenses apply only to the office (for example, painting just that room) and are fully deductible. To keep things straightforward, this calculator treats every input as an indirect, whole-home expense.
Common deductible costs include mortgage interest or rent, electricity, gas, water, homeowners or renters insurance, repairs and maintenance, property tax, and home depreciation for owners. A 10 percent business-use percentage means 10 percent of each indirect cost is deductible. Renters who pay no property tax or depreciation can still claim a deduction on rent and utilities alone.
Income Limits, Carryovers, and Common Mistakes
Both methods are subject to the gross-income limitation in IRC Section 280A(c)(5). The deduction cannot exceed the net income from the business that uses the home, so it cannot create or increase a business loss. If your office expenses are larger than your net profit, the deduction is capped at that profit.
The treatment of the disallowed excess differs by method. Under the regular method, the disallowed amount carries forward to a future year and can be used when business income is higher. Under the simplified method, the excess is lost with no carryover. That difference can matter for a business with uneven income year to year.
Common mistakes include claiming a space that is not used exclusively for business, overstating square footage, and forgetting that selling a home with depreciation claimed can trigger depreciation recapture. Keep a simple sketch of your office, measurements, and expense records to support the deduction if questioned.
Frequently Asked Questions
Common questions about home office deduction calculator
How much is the home office deduction for 2026?
Under the IRS simplified method, the deduction is $5 per square foot of qualifying office space, up to a maximum of 300 square feet, for a cap of $1,500. The $5 prescribed rate is unchanged for tax years 2024, 2025, and 2026. The regular method has no fixed cap: it is your business-use percentage applied to actual home expenses, so it can be higher or lower than $1,500 depending on your costs.
What's the difference between the simplified and regular (actual expense) method?
The simplified method multiplies your office square footage (max 300) by $5, requires no expense records, and is reported directly on Schedule C with no Form 8829. The regular method takes your business-use percentage and applies it to actual costs like rent or mortgage interest, utilities, insurance, repairs, property tax, and depreciation. The regular method has no dollar cap but requires Form 8829 and detailed recordkeeping.
Can W-2 employees claim the home office deduction?
No. The Tax Cuts and Jobs Act suspended the unreimbursed employee business expense deduction for tax years 2018 through 2025, which includes the home office deduction for employees. Only self-employed taxpayers, sole proprietors, single-member LLC owners, and partners can claim it on Schedule C. Employees who work from home cannot deduct their home office on a federal return for those years.
What counts as exclusive and regular use of a home office?
Exclusive use means the space is used only for business, not for any personal activity. A spare bedroom used solely as an office qualifies; a kitchen table used for both work and family meals does not. Regular use means you use the space for business on a continuing basis, not just occasionally. The area must also be your principal place of business or a place where you regularly meet clients.
How do I calculate my home office business-use percentage?
Divide the square footage of your office by the total square footage of your home. For example, a 150 square foot office in a 1,500 square foot home is 10 percent. Under the regular method, you apply that percentage to indirect whole-home expenses to find the deductible portion. You can also use a room-count method if all rooms are roughly equal in size.
Do I need to file Form 8829 to claim the home office deduction?
Only for the regular method. Form 8829, Expenses for Business Use of Your Home, allocates your actual costs and tracks any carryover. The simplified method skips Form 8829 entirely: you report the deduction directly on Schedule C. This is one reason many taxpayers with modest expenses choose the simplified option.
Can the home office deduction create a business loss?
No. Under the gross-income limitation in IRC Section 280A(c)(5), the deduction cannot exceed the net income from the business that uses the home, so it cannot create or increase a loss. With the regular method, any disallowed amount carries forward to a future year. With the simplified method, the disallowed excess is lost with no carryover.
Which method should I choose — simplified or regular?
Choose the regular method if your business-use percentage applied to actual home expenses is more than $1,500 and you are willing to keep records and file Form 8829. Choose the simplified method if your calculated regular deduction is below $1,500, or if you prefer to skip recordkeeping and depreciation tracking. You can switch methods from year to year.