Home Office Deduction Calculator
Use this free home office deduction calculator to estimate how much you can deduct for the part of your home you use for business. The home office deduction is for self-employed people, freelancers, and small business owners.
Both methods
$ 6,558
The simplified method would give you $1,250.
Want Taylor to claim this on your return?
Who Can Claim the Home Office Deduction
If you’re self-employed and use part of your home to run your business, you may be able to deduct a share of your housing costs. The space must meet the IRS rules explained below. W-2 employees can’t claim the deduction for their employment work, even if they work from home every day. That restriction began in 2018, and the 2025 tax law made it permanent.
If you’re self-employed, your space generally has to pass both of these tests:
Regular and exclusive use: You use a specific area only for business, continuously. It doesn’t need to be a separate room, but it has to be a separately identifiable space.
Principal place of business: Your home is where you do most of your work, or where you handle administrative tasks such as billing and bookkeeping when you have no other fixed location where you do a substantial amount of that work.
A space where you regularly meet clients, or a separate structure such as a detached studio, may qualify even if your home isn’t your main workplace. You must still use that space regularly and only for business.
The exclusive-use rule has two exceptions: a qualifying home daycare and storage of inventory or product samples. For storage, you must sell products wholesale or retail, have no other fixed business location, and regularly use a clearly defined area of your home for storage.
Renters can qualify, too. Under the regular method, they deduct the business share of their rent instead of mortgage interest or home depreciation.
Does Working in a Cafe or another Space Prevent You From Home Office Deduction?
No. Working from a café sometimes does not automatically disqualify your home office.
You can work elsewhere and still qualify if you regularly use a dedicated area at home for business, including billing or bookkeeping, and have no other fixed location where you do a substantial amount of that administrative work.
Simplified vs. Regular Method
Simplified Method
You can deduct $5 per square foot for up to 300 square feet, for a maximum of $1,500 a year. You don’t track home expenses or claim depreciation, so those years add no depreciation to pay tax on when you sell.
If you own your home and itemize, you still claim your full mortgage interest and property taxes on Schedule A.
Regular Method
You deduct your business-use percentage of the costs of running your home, such as rent, mortgage interest, property taxes, insurance, utilities, and general repairs. Homeowners also deduct depreciation on the office portion of the home, spread over 39 years.
There’s no fixed dollar cap, but your business income may limit the deduction. You’ll also need to file Form 8829 and keep records of the home expenses you claim.
Simplified method
Regular method
How it’s figured
$5 × office square feet
Business-use % of home costs
Maximum deduction
$1,500 (300 sq ft)
No set dollar cap
Records you keep
Office size and business use
Receipts for every home expense
Depreciation
None
Yes, for homeowners
Deduction over the income limit
Lost
Carries forward to next year
Where you figure it
Schedule C worksheet
Form 8829
Source: IRS, Simplified Option for Home Office Deduction; IRS Publication 587 (2025). Checked September 2026.
Which Home Office Deduction Method Usually Saves More
The regular method tends to win when your housing costs are high compared with your office size, which is common for renters in expensive areas.
The simplified method tends to win when your office is small, your costs are low, or you’d rather skip depreciation and the extra records.
For example, say you rent a 2,000-square-foot apartment and use a 200-square-foot room only for your business, so your office is 10% of your home. You pay $24,000 a year in rent, $3,000 in utilities, and $300 for renter’s insurance. All figures are estimates for illustration.
Simplified method: 200 square feet × $5 = $1,000.
Regular method: 10% of $27,300 = $2,730.
In this case, the regular method gives you $1,730 more in deductions. With lower rent or a larger home, the gap narrows, and the simplified method can come out ahead.
Home Expenses You Can Deduct Under the Regular Method
The regular method sorts your home costs into three groups, and each is handled differently:
Direct expenses: Costs for the office alone, such as painting or repairing it. You can generally deduct these in full.
Indirect expenses: Costs for running the whole home, such as rent, mortgage interest, property taxes, insurance, utilities, and general repairs. You deduct your business-use percentage of these.
Unrelated expenses: Costs for parts of the home you don’t use for business, such as lawn care or painting a bedroom. These aren’t deductible.
Most people find their business-use percentage by dividing office square footage by total square footage.
You can’t deduct mortgage principal under either method. Under the regular method, homeowners may depreciate the part of the home used as an office. The calculation uses the lower of the home’s adjusted basis (generally what you paid plus improvements) or its fair market value when business use began, excluding the value of the land.
How to Claim the Home Office Deduction
If you use the regular method, you figure the deduction on the document Form 8829 and carry the result to line 30 of Schedule C. If you use the simplified method, you skip Form 8829 and use the worksheet in the Schedule C instructions.
You choose a method each year on your original, timely filed return. You can’t switch methods for that year, but you can choose the other method the following year.
With either method, the deduction is generally limited to the income your business earns from using the home, minus your other business expenses.
Under the regular method, the business share of otherwise deductible mortgage interest and property taxes isn’t subject to that income limit. Other home office expenses you can’t deduct this year may carry forward. Under the simplified method, unused amounts don’t carry forward.
Frequently Asked Questions About the Home Office Deduction Calculator
Here are frequently asked questions about the home office deduction calculator:
How Much Can I Deduct for a Home Office?
It depends on your method. The simplified method lets you deduct up to $1,500 a year, or $5 per square foot for up to 300 square feet. The regular method has no dollar cap, but most home costs are limited to your business income. What you save depends on your tax rate.
Can W-2 Employees Claim the Home Office Deduction?
No. Employees can’t deduct home office costs on their federal return, even if they work from home full time. The deduction ended for employees starting in 2018, and the 2025 tax law made that permanent. If you also have self-employment income, you may be able to claim a home office for that business.
Does My Home Office Have to Be a Separate Room?
No. The office can be part of a room, as long as it’s a separately identifiable space you use regularly and only for business. It doesn’t need a permanent wall or partition. A desk in a room your family also uses for other things generally won’t qualify.
Can I Switch Between the Simplified and Regular Methods?
Yes, you can change methods from one year to the next. Your choice for a given year is locked once you file your original return. If you return to the regular method after using the simplified method, you’ll use a specific IRS depreciation table for the office portion of your home.
Does Claiming a Home Office Deduction Trigger an Audit?
The IRS doesn’t say that a home office deduction triggers an audit on its own. It selects returns through computer screening against similar returns, random selection, and related examinations. Keep records showing the space is used regularly and only for business, along with receipts for any home expenses you claim.
What Happens If My Deduction Is More Than My Business Income?
Most home office costs are limited to your business income minus your other business expenses. Under the regular method, the unused amount carries forward to future years, and the business share of mortgage interest and property taxes isn’t limited. Under the simplified method, anything above the limit is lost.
Do I Owe Tax on Home Office Depreciation When I Sell My Home?
Generally, yes. If your office was inside your home, you can still exclude the rest of your gain, but not the part equal to depreciation you claimed, or could have claimed, after May 6, 1997. A separate structure follows stricter rules. Years you use the simplified method add no depreciation.
This calculator and page give general information, not tax advice. Your results depend on facts the calculator can’t check, so talk with a CPA about your specific situation.
